NON-UK RESIDENT PROPERTY CAPITAL GAINS

Disposing of Residential or Commercial Property in the UK
Non-UK resident landlords face a distinct set of rules when disposing of residential or commercial property in the UK. This includes commercial property like shops and offices, and agricultural land. The disposal could trigger a Capital Gains Tax (CGT) liability in the UK. Our team at can help you navigate these regulations, ensuring that you report your disposal correctly and pay the correct amount of tax due.
As a non-UK resident landlord, you will typically be subject to CGT on the sale of a UK property. This applies to both residential and commercial properties. Here are the rules that apply:
  • Non-UK residents are required to report all disposals of UK property or land, regardless of whether a gain or loss is made, to HM Revenue & Customs (HMRC) within 30 days of the conveyance date. The method of reporting is through a Non-Resident Capital Gains Tax (NRCGT) return.
  • If you’re already registered for Self-Assessment, you can choose to pay your CGT either straight away or as part of your Self-Assessment tax return.
  • For individuals : The rates for residential property are 18% or 28%, depending on their total taxable income
  • For non-residential property : The rates are 10% or 20%.
  • For non-resident companies : The corporation tax rate applies, with currently 25% for an investment company and 19% for trading companies with profits under £50,000.
The gain or loss on a property is calculated by subtracting the original purchase price from the selling price, less other associated purchase, sale and improvements costs. When it comes to valuing the property, different methods can be used. Here are a few methods that could apply:
  • Actual Cost : This involves taking the original purchase price of the property.
  • Valuation as of April 2015 : For properties owned before April 2015, non-UK residents can choose to use the property’s market value at 5 April 2015 as the acquisition cost. This is also known as ‘rebasing’. This method could be beneficial if the property has gained significant value since it was originally purchased.
  • Time Apportionment : Alternatively, you can time-apportion the gain over the whole period of ownership. The part of the gain that relates to the period of ownership before 6 April 2015 is not subject to UK tax
It is worth mentioning that UK property held indirectly, for instance through a company or a trust, could also be subject to tax on its disposal. From April 2019, gains on indirect disposals are taxable where a person makes a disposal of an entity that derives 75% or more of its gross asset value from UK land. There’s an exemption if the person owns less than a 25% interest in the entity.
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