Non UK resident individual? Here’s what you need to know about recent Capital Gains Tax changes.
Are you looking for help with Capital Gains Tax? It can be a confusing issue, especially with the new changes introduced recently. We have outlined below some of the key Capital Gains Tax information and hope that it helps. However, you may wish to contact one of The Peloton’s Tax Advisers for help with your own personal tax issue.
In the past, non residents could dispose of any assets in the UK free from UK tax consequences, but this has slowly changed over recent years. In 2015, non resident individuals and trusts became liable to CGT on the disposal of UK residential properties. However no tax was chargeable on Non Residents (NR) who sold companies which owned UK residential properties or any NR who sold a commercial property.
With effect from 6th April 2019 however, NRCGT started to apply to commercial property and land for individuals. In addition to this, NRCGT is due on indirect disposals of UK land and property from this date. This was amended to include a sale of shares in a company that owned UK property if at least 75% of the company’s value was in property. The shareholder would be caught under the new rules if they owned at least 25% of the company.
A NRCGT return has to be submitted by an NR individual, trustee, landlord or partner in a partnership. It will also need to be submitted by a taxpayer who becomes NR in the tax year and then disposes of land or property after this date. Please note a return is required regardless of whether a gain or loss is made. There are some exceptions however with the main ones being when a transfer is made at no gain/no loss, for example between husband and wife or when a gain is wholly exempt due to Principal Private Residence relief.
Each return must be accompanied by a computation of the gain or loss clearly setting out the figures and their sources.
There are 3 methods of calculating the gain made on a residential property and the taxpayer can choose the best of the three. A gain on a non residential property or land post April 2019 is made with reference to the market value on 5th April 2019. Gains before that date on non commercial property aren’t taxable.
Non Resident Capital Gains Tax Rates
The NRCGT rates for individuals are 10% and 20% on most assets and 18% and 28% on residential property. The actual rate(s) will depend on the taxpayer’s UK income in the same year. The calculations are made after deducting the annual exemption allowance (£12,000 in 19/20) and PPR relief if available. The rate of NRCGT for companies is 19%.
Non Resident Capital Gains Tax Payment & Deadline
In most cases this will be 30 days from the date of disposal of the property. The return also has to be submitted within this deadline. HMRC has offered one exception to the 30 day payment rule; if a NR taxpayer is already within the self assessment regime, then you can choose to pay when the return is submitted or at your normal self assessment due date.