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CGT extends to non-residents selling UK residential properties from 6 April 2015

by Mike Abbott | Mar 20, 2016
  • If you are a non-UK resident, you will need to inform HM Revenue and Customs (HMRC) within 30 days of selling your UK residential property as Capital Gains Tax (CGT) may be due from 6 April 2015.
    CGT non-resident mortgages

    In May 2014, I examined how new CGT rules, first announced in Chancellor George Osborne's 2013 Autumn Statement, could affect non-resident property owners selling or disposing of their UK residential properties.

    In November 2014, HMRC officially announced that the changes will come into effect from 6 April 2015.

    The original motivation behind the extension of CGT to non-residents was, according to David Gauke, Exchequer Secretary to the Treasury, to equalise the playing field between UK residents and non-residents when it comes to the payment of CGT on non-primary residences:

    “Britain is an open country that welcomes investment from all over the world…However, the government does not believe that it is right that UK residents pay Capital Gains Tax when they sell a home that is not their primary residence, while non-residents do not.”

    For non-residents, what this means is that they will now be charged CGT based on the location of their property, and not the location of the seller.

    Who will the new rules affect?

    As stipulated in HMRC's official guidelines, the new rules will affect:

    • Non-resident individuals
    • Non-resident trustees
    • Personal representatives of non-resident deceased persons
    • Certain non-resident companies (generally those companies controlled by five or less people)
    • Some UK residents selling UK property while abroad
    • Any of the above who are partners in a partnership

    When it comes to the amount of CGT to be paid, several factors need to be taken into account:

    • The amount of gain for the ownership period from 6 April 2015 onwards
    • Whether or not you have unused losses from disposing of other UK residential property
    • Where applicable, the amount of any available private residence relief
    • Whether or not the annual exempt amount is available
    • The amount of indexation allowance available for companies
    • The rate of CGT

    What you need to do

    The new rules mean you are required to tell HMRC that you have sold or disposed of your UK property within 30 days of selling it. As I highlighted in 2014:

    “A key point in the new CGT extension is that the charge will apply from April 2015, and only to gains arising from that date.”

    As one of the leading foreign national and contractor mortgage specialists in London, our mortgages team has been helping non-residents and self-employed contractors obtain competitive mortgages since 2006. In this case, they will establish the likely capital gain on your property.

    However, if you are interested in having your property valued, you will need to get a surveyor from the Royal Institution of Chartered Surveyors to value your property, or, alternatively, engage a local estate agent.

    For more information on the topics covered in this post, or for any other mortgage-related queries, Sable can help, contact us on +44 (0) 20 7759 7519 or email our wealth team.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

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