Published 24th October 2018
Until 6th April 2019 non-residents are only subject to Capital Gains Tax (CGT) on the disposal of UK residential property. Gains made on disposals of other types of asset including commercial property are outside thescope of UK tax. Purpose built student accommodation is not usually classed as“residential property” for the purposes of CGT if the block comprises more than15 bedrooms and is occupied by students for 165 days or more in the year forthe purpose of taking a course in education. But this definition might not hold for some building configurations andHMRC is seeking to tax some arrangements by changing the definition.
After 5th April 2019 all gains made by non-residents on the disposal of any other UK property (including student accommodation) is subject to Capital Gains Tax on the gain arising after that date. For non- residents who dispose of UK property or assets that are not residential property, tax is charged on the increase in value of the property either between the date of purchase and the date of disposal or if you owned the property at 5th April 2019 the increase in value of the residential property between 5th April 2019 and the date of disposal. There are several permitted methods of arriving at the value as at 5th April 2019 – you may choose that which gives the lowest tax payable.
The 2015 reference date for residential property will be unchanged.
All disposals of UK residential property must be reported to HM Revenue and Customs within 30 days of completion unless the taxpayer is registered for UK tax AND makes the transfer to his or her spouse. Failure to make such a return can be met with very high penalties. This will be extended to include non-residential property after 5th April 2019.
The information contained in this newsletter is believed to be correct at the time of publication. The content of this newsletter is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.
Landlords Tax Services Ltd, specialises in the taxation of residential property income and gains and more than half its clients are resident outside the UK. If you would like specialist help contact Maurice Patry F.C.A .at firstname.lastname@example.org or for more information visit our website at Landlords Tax Services Ltd.
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