Published 27th March 2017

Where a non-resident transfers a UK property the transfer has been subject to Capital Gains Tax (CGT) since 5th April 2015. Where a non-resident owner disposes of a property held before 5th April 2015 only the gain accruing since that date is subject to CGT. Where the transfer is between husband and wife no CGT is payable. However where a person transfers UK property to his or her spouse after 5th April 2015, the transferee has no entitlement to rebase the property at 5th April 2015 and will be taxed on the whole of the gain arising because he or she did not own the property on 5th April 2015.

For example 

Mr Jones bought a property in London for £100,000 in 1995. He emigrated in 1998 and married sometime later. In 2016 he transferred the property to his wife when the property was worth £1,000,000. Mrs Jones sold the property in 2017 for £1,100,000. On 5th April 2015 the property was worth £850,000.

There was no CGT on the transfer to Mrs Jones because of the husband/wife relationship. When Mrs Jones sells in 2017 the disposal triggers CGT on a gain of £1,000,000. She is subject to CGT on the whole of the gain because she did not own the property at 5th April 2015.

Had Mr Jones sold the property to a third party in 2017 then his disposal would have attracted CGT on the gain in value of £250,000 between 5th April 2015 and the date of disposal.