Capital Gains Tax Charge on Non-Residents
Non-Resident Capital Gains Tax Reporting (NRCGT)
We advise non-resident clients on how to manage their UK capital gains tax (CGT) position.
Individuals, companies, trustees and personal representatives who are not resident in the UK and who have sold or disposed of UK property or land are required to file a Non-Resident Capital Gains Tax Return within 60 days of completion.
Who could become taxable?
Any of the following who own and dispose of a UK residential property:
- An individual who is not deemed to be resident in the UK as defined by the Statutory Residence Test.
- Non-resident personal representatives of an estate of a deceased person.
- Non-resident trustees of a settlement.
- Non-resident partners of a partnership or members of an LLP.
- Non-resident companies.
What is taxable?
Most disposals of an interest in UK land and property are now taxable under these rules.
This includes both residential and non-residential land and property.
This included direct disposals or indirect disposals.
An indirect disposal must be reported when a non-resident person sells or disposes of their interest in an asset that derives 75% or more of its gross value from UK land and they have at least a 25% interest in that asset.
How is the gain calculated?
Direct Disposal of Residential Property
The default method of calculating the gain arising will be to calculate the uplift in the property’s value from 6 April 2015 to the date of sale.
Alternatively, it is possible to elect to time-apportion the gain on a straight line basis, with the relevant proportion being the gain accrued from 6 April 2015. It is also possible to elect to use the original cost of the property rather than its value at 5 April 2015 in arriving at the taxable gain.
Indirect Disposal
If you indirectly dispose of UK property or land, or dispose of non-residential UK property or land where you owned the asset before 5 April 2019, the standard approach for calculating your gain is to use the market value at 5 April 2019.
In any scenario we will calculate and advise you on the most favourable method of calculating your capital gain.
Payment and administration
Non-resident individuals and companies will need to report the disposal to HMRC within 60 days of sale of the property and make payment of the tax at the same time. If they are already within Self-Assessment, the gains will be reported as usual within a tax return, and the tax payment should be made at the usual time.
If any of the above circumstances apply to you and you are thinking of selling, or have sold UK Land or Property please contact us for expert advice.
