Non-Residents: beware of changes to Capital Gains Tax

The deadline to submit a Capital Gains Tax Return, and pay any CGT due, on a disposal of UK land or buildings has been extended, with immediate effect, from 30 to 60 days.

Notifying HMRC

• From 5th April 2019, you must file a Disposal Return whenever you dispose of UK property including: residential property and non-residential property (including, student accommodation, commercial property, hotel rooms, and care-home rooms)
• From 27th October 2021, the notification to HMRC MUST be filed within 60 days (previously 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 £3,000 of increase in value is tax free (this figure changes each year and is correct for individuals for the year 2024-25)
• 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 27th October 2021, any Capital Gains Tax due must also be paid within 60 days (previously 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

The information contained in this article is believed to be correct at the time of publication. The content of this article 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.