Extension of CGT to non-residents investing in non-residential UK property

As from 6 April 2015, non-residents are liable to UK capital gains tax (CGT) on the sale of residential dwellings situated in the UK. This change was implemented in order to bring the UK in line with many other countries, with an established pattern of taxing property situated in their jurisdiction. A PPR election is available where the non-resident individual spends at least 90 days per tax year at the residence.

From 6 April 2019, non-residential (commercial) UK property will also be brought into this regime.

It is important to note that the new rules only seek to tax the proportion of the gain that accrues from 6 April 2019, although it may be possible to elect for a retrospective basis of computation and use the original cost figure.

The new rules will most likely have the same set of reporting requirements as the disposal by non-residents of residential UK property:

  • The chargeable disposal must be reported to HMRC within 30 days of conveyance of the property. Once the report has been made, HMRC will email a payment reference, together with details on how to make payment.
  • A separate report must be filed with HMRC for each property sold post 5 April 2019. The report is made by completing an online form with HMRC.
  • A detailed CGT calculation must accompany each capital gain or loss reported.
  • The CGT must be paid within 30 days of conveyance.

Simon Boxall, Tax Director at Ward Williams says:

“Given the lack of awareness of the requirement to file non-resident CGT reports for the disposal of UK residential property when the rules were changed in April 2015, HMRC really need to undertake well targeted publicity to avoid further confusion. In particular, taxpayers simply may not be aware of the new rules to file returns within 30 days of the sale of UK commercial property, regardless of whether they already file self-assessment tax returns with HMRC each year.”

Whilst the information provided above is believed to be true, it is provided without acceptance by Ward Williams and/or Simon Boxall of any responsibility whatsoever, and any use you wish to make of the information is therefore, entirely at your own risk.

About the author

Simon is the Tax Director at Ward Williams and has more than 20 years of practical experience working in the tax profession.

 

Specialising in personal tax, Simon qualified as a Tax Technician in 2007, having been awarded with the Ivison medal for attaining the highest mark in the Personal Taxation paper in 2006.

 

As department head, Simon oversees the tax team across the Ward Williams group, whilst managing a diverse portfolio of clients including high net worth individuals, doctors, directors of owner managed businesses, partnerships and sole traders.

simon.boxall@wardwilliams.co.uk

01895 236335