I own a house which I let out. I am about to take it back into my possession with a view to selling it in around six months. Currently, I live in France and am tax resident there. Can I claim the house to be my principal residence for CGT purposes (it will be my main residence when I am in the UK)? Do I have to change my tax residency back to the UK first, to avoid a liability in France? 

Arthur Weller replies:  

In the UK, you cannot claim a house to be your principal private residence for CGT purposes unless you actually live in it. It is not clear what you mean by: “it will be my main residence when I am in the UK”. Being available to use is not the same as actual use. See HMRC’s Capital Gains Manual at CG64485, where it states: ‘It therefore follows that a dwelling-house must be in use as a residence of that individual before it can be validly nominated.’ However, if you do actually live in the UK property, you could nominate it (i.e., make a valid election that it should be your main residence for CGT purposes). But you would have to ensure that you are not out of date to make the election. See HMRC’s guidance at CG64420P for more of these rules. Regarding potential liability in France, unfortunately this is beyond my remit.