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Non-Residents: beware of changes to Capital Gains Tax

Published 5th March 2019; Updated 21st March 2019 / April 2021

NOTIFYING HMRC

  • From 5th April 2019 you must file a disposal Return whenever you dispose of a UK asset including: residential property and non-residential property (including, student accommodation, commercial property, hotel rooms, and care-home rooms.
  • The notification to HMRC MUST be filed within 30 days of completion (closure) or you will be charged a large penalty (sometimes over £1,000).
  • We will deal with the notification return on your behalf, but can only do so if you tell us about the disposal in good time (before completion).
  • The full calculation of the gain and any tax due is included in the disposal notification.

TAX PAYABLE

  • Every disposal of UK residential property may attract tax on the increase in value over the period of ownership, or since 5th April 2015 if you owned the asset before that date.
  • Every disposal of UK non-residential property may attract tax on the increase in value over the period of ownership, or since 5th April 2019 if you owned the asset before that date.
  • There are several reliefs and allowances that may be available, that will reduce the taxable gain.
  • The first £12,300 of increase in value is tax free (this figure changes each year and is correct for individuals for the year ended 5th April 2022).
  • The rate of tax applicable to the rest of the gain on the disposal of residential property will be either 18% or 28%.
  • The rate of tax applicable to the rest of the gain on the disposal of non-residential property will be either 10% or 20%.


MAKING YOUR PAYMENT TO HMRC

  • From 5th April 2020 any Capital Gains Tax due must also be paid within 30 days of the transfer (completion).

 

COMPLICATIONS

There are many traps and pitfalls when it comes to UK Capital Gains Tax, and a very simple and honest mistake can result in additional tax of many thousands of pounds. Furthermore the law changes frequently, making this a very complicated piece of legislation to deal with.

Before making any transfer, please contact us for advice, it could save you many thousands of pounds!