Non-residents and tax on chargeable gains from 6 April 2019—gains and UK immovable property
Non-residents and tax on chargeable gains from 6 April 2019—gains and UK immovable property

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Non-residents and tax on chargeable gains from 6 April 2019—gains and UK immovable property
  • Background
  • Basic scope of the rules
  • What is an interest in UK land?
  • Direct disposals of UK real property by non-residents
  • Indirect disposals of UK real property by non-UK resident persons
  • Indirect disposals—75% property richness test
  • Indirect disposals—trading exception
  • Indirect disposals—connected companies exception
  • Indirect disposals—25% ownership (substantial investor) test—minor interest exception
  • more

Background

On 6 July 2018, the government published draft legislation to be included in Finance Bill 2019 (formally the Finance (No 3) Bill 2017–19, but also known as Finance Bill 2018–19) (FB 2019). The draft legislation was subject to public consultation until 31 August 2018. It was introduced in revised form to Parliament as part of FB 2019 on 7 November 2018, following Budget 2018 on 29 October 2018. Following minor amendments at committee stages, the Finance Act 2019 (FA 2019) received Royal Assent on 12 February 2019.

FA 2019 contains significant changes to the capital gains tax (CGT) regime and the corporation tax on chargeable gains regime. With the stated aim of levelling the playing field for UK residents and non-UK residents on disposals of UK real property, FA 2019 rewrites a large part of the CGT legislation contained in the Taxation of Chargeable Gains Act 1992 (TCGA 1992). Historically, non-UK residents holding interests in UK real property were outside the scope of UK tax on capital gains. This changed with effect from 6 April 2013 when the annual tax on enveloped dwellings (ATED) CGT charge (ATED-related CGT) was introduced and again with effect from 6 April 2015 when non-resident CGT (NRCGT) was introduced in relation to disposals of UK residential property.

FA 2019 brings disposals of UK non-residential property