New CGT rules for non-UK residents

10 April, 2019

Commercial property disposals – new CGT rules for non-UK residents

From 6 April 2019, the non-resident capital gains tax (NRCGT) regime has been extended to bring both direct and indirect disposals of UK commercial property by individuals within the charge to UK tax for the first time.

An indirect disposal means a disposal of an asset, for example shares in a company, that derives at least 75% of its value from UK land.

The new rules apply to disposals of commercial property on or after 6 April 2019 and will bring additional compliance obligations for non-UK resident individuals.

A ‘disposal’ includes any occasion when a property is sold, given away, transferred or exchanged.

The time frame for reporting and payment on account of any capital gains tax is very tight:  it must be done within 30 days of the disposal completing.

Rebasing rules apply to determine the deemed acquisition cost for the purposes of calculating the capital gain.

Even if no capital gains tax is due, a return to HMRC must still be filed within the 30 day deadline. The disposal will still need to be reported on the taxpayer’s annual self-assessment tax return.

There are two options when calculating the gain:

Default option – the acquisition cost will be replaced by the value of the property on 6 April 2019.

Election option – the gain is calculated over the whole period of ownership.

Advice should be taken to determine which option is most beneficial.

A different regime will apply to non-resident companies who dispose of UK property.

Your Cripps Pemberton Greenish Team is well equipped to streamline this process. The Property Team can manage your conveyance and the Private Wealth Team can help with calculating the capital gain and reporting to HMRC.