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How much money can my brother take to Ireland from his house sale in the Uk before he has to pay tax?

He has lived and worked in Ireland for about 4 years now and due to the pending property crash here in the UK is thinking that it might be a good time to sell the house. what he doesn't want is to sell the property, transfer the money and then end up losing 40% of it say in tax! Any advice would be greatly appreciated.

Public Comments

1. It's not taking money abroad which will cost him but the sale itself. As it's not his main property, he will be liable to capital gains tax on any profit made since it's purchase. He will have an allowance of £9600 for this tax year which will be tax free but the remaining profit will be taxed at 18%. Also, the property market is unlikely to crash - merely drop a little to correct prices and then grow again albeit at a much lower rate.
2. Providing he is not resident or ordinarily resident in the UK, he will NOT be liable to Capital Gains Tax on the disposal of the house in the UK. http://www.hmrc.gov.uk/pdfs/ir20.htm The terms 'residence' and 'ordinary residence' are not defined in the Taxes Acts., but are largely based on rulings of the Courts. To be regarded as resident in the UK you must normally be physically present in the country at some time in the tax year. You will always be resident if you are here for 183 days or more in the tax year. There are no exceptions to this. You count the total number of days you spend in the UK - it does not matter if you come and go several times during the year or if you are here for one stay of 183 days or more. If you are resident in the UK year after year, you are treated as ordinarily resident here. You may be resident but not ordinarily resident in the UK for a tax year if, for example, you normally live outside the UK but are in this country for 183 days or more in the year. Or you may be ordinarily resident but not resident for a tax year if, for example, you usually live in the UK but have gone abroad for a long holiday and do not set foot in the UK during that year. It is possible to be resident (or ordinarily resident) in both the UK and some other country (or countries) at the same time. If you are resident (or ordinarily resident) in another country, this does not mean that you cannot also be resident (or ordinarily resident) in the UK. Where, however, you are resident both in the UK and a country with which the UK has a double taxation agreement, there may be special provisions in the agreement for treating you as a resident of only one of the countries for the purposes of the agreement . Provided he meets these rules, he should be OK. David Nicoll "the accountant with attitude"
3. First, if he is a non-resident of the UK and stays non-resident for at least 5 full tax years he cannot be charged UK capital gains tax. That aside, I imagine he lived in the house before he went to Ireland so, even if he is liable to UK tax, only part of the total gain would be taxable, because out of the whole period of ownership he would be allowed the years when he lived there as tax free gain, plus the last 3 years of ownership (this split is done on a straight-line time basis: you don't need intermediate valuations). Then there is a further allowance if he has been renting it out, and the first £9,600 of what remains is also exempt. However, that is the UK side. He is probably now a resident of Ireland and so also needs to look at the Irish capital gains tax rules. I doubt if there would be much, if any, Irish tax due on the gain, but I don’t know for sure.
4. Is that Northern Ireland or Southern Ireland? If it's Eire then the answers are relevant. If it's N.I. then he's under the same tax regime!!