A. Finance Act 2015 extended the scope of capital gains tax to non-UK residents disposing of UK residential property but only to the extent of gains arising after 6 April 2015. The capital gains tax legislation was amended to take account of the changes. The key changes were as follows:
- to impose a charge on the gains of non–residents from disposals of interests in residential property, essentially dwelling houses, but not communal or institutional type accommodation
- in the case of non-resident corporate entities disposing of such property, to impose the charge on closely-held companies, but to exempt companies that meet a genuine diversity of ownership test, and widely marketed investment companies
- to apply special arrangements to collect the tax due, so that the non-resident person making the disposal was required to pay tax on account directly to HMRC at or close to the time of disposal
- to operate the new non-resident CGT charge alongside the existing ATED-related CGT charge
Where, as in this case, an individual is disposing of a property which has been the owner’s only or main resident during the period of ownership then private residence relief will be due. Private residence relief applies in the normal way and can be claimed for the actual occupation period after April 2015 and the final 18 months. Letting relief is also available if the conditions are satisfied.
A non-resident capital gain must be reported on an NRCGT return within 30 days of the day after the date the property sale is completed and pay any CGT due. If an individual is already within self-assessment then the gain should be reported on the NRCGT form within 30 days but the CGT can be paid with the normal end of year tax payment.
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