Commentary

C3.1705 Non-qualifying tax years, and disposals of a main home under NRCGT

Capital gains tax
Capital gains tax | Commentary

C3.1705 Non-qualifying tax years, and disposals of a main home under NRCGT

Capital gains tax | Commentary

C3.1705 Non-qualifying tax years, and disposals of a main home under NRCGT

The non-resident capital gain tax (NRCGT) regime was first implemented in 6 April 2015 to apply to non-UK residents disposing of UK residential property. It has been further extended with changes to the regime from 6 April 2019. The changes effectively rewrote the provisions of the original NRCGT regime and extended it to include transactions in land generally. This includes the disposal of nonresidential UK property and indirect disposals of UK property with effect from 6 April 2019. The result is that all disposals of interests in UK land (including buildings) by non-residents are now within the scope of NRCGT. For detailed commentary on non resident capital gains tax (NRCGT) disposals see C2.1130 and C2.1139.

This article examines the specific impact of the NRCGT regime when there is a disposal of a main home. It applies when, for example, an individual leaves the UK and becomes non resident. The home in which they lived in the UK may be disposed during a period of non residence, and in year which is a non qualifying year for the purposes of PPR relief.

What is a non-qualifying tax year for PPR purposes?

A 'non-qualifying tax year' is a tax year where neither the individual owning the dwelling house, nor their spouse or civil partner, is tax resident in the territory in which the dwelling house is situated, and they do not meet the day count test for that year1. It

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