My VIP Tax Team question of the week: PPR and Non-resident Capital Gains Tax
I have a client who is non-resident individual for UK tax purposes, he is current living and working in France for the last several years. He owns a property in the UK which is now up for sale. This property was his main residence before leaving the UK to work fulltime overseas in 2016. The property he is currently living in France is a rental accommodation.

What considerations should I take for the calculation of the gain?

I also believe principal private residence relief to be available to him on any gain arising on the property could you please confirm if this is the case?

As your client is non-resident, any disposal of UK land or property will need to be reported under the 60 Day Reporting regime of Sch. 2 FA 2019 irrespective of whether a gain or loss arises. HMRC’s guidance on GOV.UK is under “Tell HMRC about Capital Gains Tax on UK property or land if you’re non-resident”.

Assuming the property was acquired prior to April 2015, the following should be considered when calculating the gain arising.


The first point to consider is how the calculation is made. There are three methods the client can consider which are contained in TCGA1992 SCH4AA, paras 6-9.

The default method. This requires the property to be valued at 5th April 2015. The gain or loss is the difference between the sale proceeds and the value on the 5th of April 2015.

The straight-line time apportionment method. This method calculates the gain or loss be by deducting the original cost from the sale proceeds, with the resulting gain or loss then time apportioned with only the post 5th April 2015 proportion being chargeable or allowable.
The third method to consider is the retrospective method, this calculates the gain or loss by deducting the original cost from the sale proceeds. in this instance the whole of the gain is chargeable.

The default method will apply unless the taxpayer elects to use one of the two alternative methods.


As stated in the question the property was your client’s main residence prior to leaving the UK, he may be entitled to principal private resident relief (PPR) on part of the gain. As your client is non-resident there are some further conditions to consider before considering the amount of PPR available.
The rules for PPR are different when a taxpayer owns a property located in another territory to which they are resident – s222A TCGA 1992. If a residence is in a territory in the which the individual is not resident, it is only eligible for PPR relief for a tax year if that is not a non-qualifying tax year. The definitions are contained within s.222B & s222C TCGA 1992.

A non-qualifying tax year is one in which the individual:

  • Is not resident in the territory in which the residence is located; and
  • the individual does not meet the day count test

The minimum day count for a UK tax year is 90 days, an individual is treating as residing for a day if they or their spouse are present in the dwelling at the end of the day (midnight) or present in the house at some point in the day and had stayed overnight in the property the next day. The days do not need to be consecutive days during the tax year. Individuals are also able to count day spends in other dwellings based in the same territory. Therefore, if two UK residential properties are held by the taxpayer, the day count test would be met if the individual spent 45 days in one dwelling and 45 in another.

An individual can only have one residence to which PPR relief applies. Normally the taxpayer will have two years to elect a property under s.222(5) TCGA 1992 from when this property is available to them.

However, for non-residents, the individual can give notice that their UK home is their PPR when reporting the disposal in the 60 Day Reporting return mentioned above. This determination via the non-resident CGT return can overrule an earlier election under s.222(5) but it is an irrevocable election which cannot be changed so should be considered when completing the return. However, such notice is still subject to the “90-day rule” mentioned above.

The ”90-day rule” should be checked for the periods of non-residence and, if they are met, a notice should be provided in the 60 Day Reporting return accordingly. If the “90-day rule” is not met, then PPR will be given for the period of occupation and the last 9 months of ownership.
Your client may be liable to tax in France as a result of the disposal of the UK property. If so, the UK has primary taxing rights, and any double taxation relief would be given against the French taxes.

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Apprentice Tax Advisor
0844 892 2470

Stuart started working for CTW in 2016 as a tax administrator on the overflow lines. He then moved into Finance in May 17 where he completed his AAT L2. He is now a member of the Tax team, currently studying for his ATT qualification and working towards being a valued member of the team.

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