Non-resident Capital Gains Tax

If you are involved with sales of UK residential property where the buyer or seller is tax-resident outside of the UK, you need to be aware of a new tax that came into effect on 6 April 2015: non-resident CGT (NR CGT).

The NR CGT charge is applied at different rates according to whether the seller is a non-resident closely-held company, fund, individual, personal representative or trustee. It applies to gains made in the period from 6 April 2015 to the disposal date of the property, so a small amount of tax likely to be payable on property sales made in 2015/16.

However, when such a sale is made a NR CGT return must be submitted to HMRC within 30 days of the conveyance of the property, and this must be done online. The return must be made whether there is any NR CGT to pay or not, where there is a loss on the disposal, and even where the taxpayer is due to report the disposal on their own personal or corporate self-assessment tax return.

Where the vendor is not registered for UK income tax, corporation tax or the annual tax on enveloped dwellings (ATED), the NRCGT charge must be paid within 30 days of the conveyance date. This payment can only be made once the NRCGT return has been submitted and HMRC have replied with a reference number to use when making the payment. There are penalties for failing to file the NR CGT return on time, and failing to pay the tax on time.

If the taxpayer is registered for UK tax they can opt to pay the NRCGT due at the same time as the tax due for their normal personal or corporate tax.

Conveyancing solicitors need to be aware of the very tight tax reporting and payment deadlines. Property developers need to warn non-resident customers that they will be liable to tax on any gain made when they sell the residential property and that gain includes any discount in the price achieved by buying “off-plan”.

News / Blog

13th
December

Autumn Budget 2017 – Business Tax Implications

Since the budget statement in November, a number of further details have been released. This week, we have a look…

5th
December

Review of the Budget – 2 Weeks On

It’s been two weeks since the Autumn Budget. Our initial reactions remain the same, but with more information published in…

30th
November

Cloud Accounting – Soon To Be A Necessity For All Businesses

There are a number of implications for Stockport small businesses that came out of last week’s budget. We will be…

22nd
November

Autumn Budget 2017 – Initial Reactions for Small Business

The Autumn budget is out. The Chancellor of the Exchequer, Philip Hammond MP has delivered his Autumn Budget 2017 speech…