Capital Gains for Non-Residents

Non-UK residents have been subject to the Capital Gains Tax on the sale of UK residential properties since 6th April 2015. Prior to the introduction of this legislation, UK assets weren’t in the scope of UK tax unless the individual met the temporary non- residence rules.

Our Capital Gains Tax services include:
● Expert advice on how to make efficient elections
● Estimates and calculations of tax position
● Completing paperwork
● Reporting the transaction to HMRC
Self-assessment tax returns as applicable

What is subject to tax?
Since this legislation, the sale of UK properties are liable for UK taxation regardless of the seller’s resident status in the year of sale. The main difference when compared to sales of property by UK residents is that only the portion of the gain arising since April 2015 (when the legislation was introduced) is subject to tax.

How is the gain in property value calculated?
The introduction of the April 2015 legislation means that non UK residents now have three possible ways to calculate the gain arising on the sale of their UK property. Two of the calculations require the property value at April 2015. Harris Stewart has a lot of experience in preparing these three calculations so that you can ensure the most efficient one is used.

Occupancy rules
Other considerations when calculating Capital Gains Tax payments are Principal Private Residence Relief (PPR) and Letting relief. These still apply to non-residents of the UK and can reduce the amount of tax paid.

When this applies after April 2015, an occupancy test may have to be met. Harris Stewart can also advise on whether you qualify to make PPR elections for the period you are overseas. There are time limits which need to be considered and advice should be sought sooner rather than later in this respect and certainly well before you decide to sell your property.

Reporting the sale
Once a property has been sold, either at a loss or a gain, it must be reported within 30 days of completion and any tax owed may also be due at this time. There is an exception to this rule for individuals who are in the UK self-assessment system. They are currently still able to pay the Capital Gains Tax by 31st January following the year of sale.

An individual’s other UK income in the year of sale will affect the amount of tax that is payable. All individuals will be entitled to an annual exemption, and then will pay tax at either 18% or 28%, or a mix of the two rates.

Contact Harris Stewart today

At Harris Stewart we provide expert advice and calculations of your Capital Gains Tax and have years of experience with matters involving HMRC. Call us today on 01403 216171 or email to learn more about our services and how we can help you.