Capital Gains Tax for non-residents

Non-residents disposing of UK residential property are now subject to Capital Gains Tax (CGT), which means that specialist tax advice is essential to maximise the CGT efficiency of property holdings. That’s where Milsted Langdon Chartered Accountants in Bath, Bristol, London, Taunton and Yeovil can help.

The new regime was introduced from April 2015 for non-resident individuals, non-resident trustees, personal representatives of non-resident deceased persons and certain non-resident companies (generally those controlled by five or fewer people).

Non-residents are liable to CGT at the same rates as UK taxpayers, of 28 per cent or 18 per cent on residential property gains above the annual exempt amount, while non-resident companies are subject to tax at the same 20 per cent rate as UK companies and will have access to an indexation allowance.

A new rule has also been introduced to restrict access to private residence relief, which provides a CGT exemption on gains on the disposal of someone’s main home.

The property can only be regarded as a non-resident’s main residence for PPR purposes for a tax year in which they meet the 90-day test, i.e. they must have been living in the property for at least 90 midnights in that year.

Those non-residents liable to CGT on residential property must report to HM Revenue & Customs (HMRC) within 30 days of the date of completion and make a payment of any tax that is due. Where someone is already in the UK tax reporting system, they will be able to make a payment as part of their self-assessment return instead.

The new CGT regime for non-residents has significant implications for the structuring of future residential property acquisitions by non-residents and Milsted Langdon’s tax specialists can provide expert advice to assist in maximising the CGT efficiency of residential property holdings.

For more information on how our chartered accountants can assist with property tax in Bath, Bristol, London, Taunton and Yeovil, please contact us.