New Capital Gains Tax Rules

Non-Resident Capital Gains

As from 6 April 2015, non-UK residents selling UK residential properties will be subject to UK Capital Gains Tax (CGT).

CGT will be charged on the proportion of the gain which relates to the period 6 April 2015 to the date of disposal. There are two options when calculating the gain:

  • Obtain a value of the property at 5 April 2015 (‘rebasing’) and use this as the base cost of the property.
  • Time-apportion the gain or loss over the total period of ownership.

These disposals must be declared to HMRC via a Non-Resident Capital Gains Tax Return (NRCGT) within 30 days of conveyance regardless of whether they are already required to file a Self-Assessment Tax Return.

Non-Resident Capital Gains Tax Return (NRCGT)

A NRCGT return is an online form which includes details of the property, exemption or relief claims, property valuations, payment instructions and is supported by a computation of the gain or loss on disposal. If an individual disposes of more than one property after 5 April 2015, they must submit a separate return for each property.

The return should be filed regardless of whether there is a CGT liability. If CGT is due, this is payable within 30 days of conveyance of the property. Non-UK residents who are already in Self-Assessment can elect to settle their liability as part of their end of year tax return.

Capital Gains Tax

Non-resident individuals are subject to CGT at 18% or 28% on their capital gains depending on their total UK taxable income and chargeable gains for the tax year. They are also entitled to claim the annual exemption for CGT (£11,100 for 2015/16).

Companies are subject to tax at 20% and an indexation allowance is given to relieve the gain attributable to inflation from 6 April 2015.

Trusts are taxed at 28% and are entitled to an annual exemption being half that available to individuals.

Losses on the disposal of UK residential properties are ring-fenced for use against gains arising to the same non-UK resident on the disposal of other UK residential properties in the same tax year. Unused losses are available to carry forward to offset against future gains arising on the disposal of UK residential properties by the same person.

If you are affected by the new capital gains tax rules or would like further advice, please call Loveth Watson on 01733 305163 or email her at: loveth@greenstones.co.uk

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