Do I pay capital gains on sale of main home in UK now I am an Australian citizen?
Whether you are a citizen or not, is actually not relevant for income tax purposes. The question that is relevant is, whether you are an Australian resident for income tax purposes. Let’s assume you became an Australian resident for tax purposes when you first arrived here. Let’s assume that was 2 years ago. For CGT purposes, you are taken to acquire that house in UK 2 years ago at its market value then. Therefore when you sell it now, you will be assessable on the gain from 2 years ago until now. I doubt you can rely on the Main Residence exemption for that 2 year period. Not fully anyway. When a taxpayer is changing a main residence, yes, he/she can have a period of 6 month to have 2 main residences (buying one and trying to sell the other). Generally, you can only have 1 main residence at all time. If you live and reside in Australia, you can’t possibly live in UK as well….
