Capital Gains Tax Charge on Non-Residents
We advise non-resident clients on how to manage their UK Capital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased. The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale. A number of tax reliefs are available to exempt or reduce the tax that may apply. Basic tax planning may... More (Capital Gains Tax ("CGT") applies in certain cases when an asset is sold for more than it was originally purchased. The taxable gain (profit) may be triggered following the transfer of an asset, although commonly this would follow a sale. A number of tax reliefs are available to exempt or reduce the tax that may apply. Basic tax planning may... More) position.
Individuals who are not resident in the UK are generally exempt from CGT on gains made on the disposal of their UK assets. However, since 6 April 2015, gains made by non-residents on the disposal of UK residential property will become chargeable to UK CGT.
Please read on or contact us now for on +44 (0) 20 8037 1100 or by email firstname.lastname@example.org for expert advice in this area
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 residential property are now taxable if they are considered to be a dwelling during a relevant period of ownership.
How is the gain calculated?
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.
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 Her Majesty's Revenue and Customs (HM Revenue and Customs or HMRC) is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support and the administration of other regulatory regimes including the national minimum wage.... More within 30 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 a UK residential property please contact us for expert advice.
We work on a fixed fee basis and will always agree fees in advance once the scope of the advice and/or compliance requirements has been agreed with a client.
Our private client teams are led by Julian Brooks and Jamie Favell, both of whom have a wealth of experience in private client tax matters.
We would be pleased to arrange an initial free introductory telephone call with a view to assessing your tax position and agreeing the next steps with regards providing formal detailed advice and/or assistance with your tax return preparation.