Capital gains tax charge on UK residential property owned by non-residents

By Tolley
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The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Capital gains tax charge on UK residential property owned by non-residents
  • Summary
  • Chargeable persons
  • What is a NRCGT disposal?
  • Calculating the gains and losses
  • Compliance

This document discusses key points on the rules, chargeable persons, meaning of NRCGT disposal, methods of calculating the gains and losses and compliance matters.

 

Historically, only UK resident individuals and entities, together with temporary non-UK resident individuals and those operating via a UK permanent establishment, branch or agency, have been subject to UK capital gains tax (CGT) whilst non-UK residents have not. However, this was widened from 6 April 2013 to include disposals of UK dwellings owned by non-resident companies, partnerships and collective investment schemes where the dwelling was subject to the annual tax on enveloped dwellings (ATED) charge. For more on the ATED charge and the ATED-related CGT charge, see the Overview of the ATED regime guidance note (subscription sensitive).

From 6 April 2015, the CGT regime was extended to non-UK residents disposing of UK residential property.

The regime was further extended to cover non-residential UK property with effect from 6 April 2019, meaning all disposals of interests in UK land by non-residents are within its scope. For more details, see the Overview of the rules on disposals of interests in UK land by non-residents guidance note (subscription sensitive).

FA 2019, Sch 1

This guidance note gives an overview of the rules on UK residential property with a focus on the application to individuals.

Note that the rules also apply to land in Scotland and Wales. It is only stamp duty land tax (SDLT) and landfill tax which have been devolved to Scotland and Wales; CGT remains reserved by the UK Parliament.

Summary

Essentially individuals (including partners in partnerships which own UK property), personal representatives, trustees, companies and funds are subject to CGT under these rules if:

  • that person is non-resident in the UK at the time of disposal, and
  • the disposal is of UK residential property

The rates of tax which apply are 18% or 28% for

More on Capital gains summary: