Update to Non Resident Capital Gains Tax Rules

BLOG30th May 2018

From April 2019, HMRC have proposed that new Capital Gains Tax provisions will apply to the disposal of all UK land and buildings for all non-UK resident individuals, companies, personal representatives and trusts. This is an extension of the existing provisions which currently only apply to disposals of UK residential property.

A summary of the current and proposed new rules are set out below:

Current Rules Proposed Rules from April 2019
Disposal of UK residential property Subject to UK Capital Gains Tax or Corporation Tax on gains arising from April 2015 Rules are extended to cover all non-resident companies not just companies that are closely controlled
Disposal of all other UK land & property Not currently in the scope of UK Tax Subject to UK Capital Gains Tax or Corporation Tax on gains arising from April 2019
Disposal of shares in property company Not currently in the scope of UK Tax Subject to both the shareholder and company meeting certain criteria, these disposals will be subject to UK Capital Gains Tax or Corporation Tax


Reporting Requirements

The deadline for reporting the transaction is unchanged, being within 30 days of disposal. Payment of the tax is in line with normal tax payment deadlines unless the disposal is made by a non-resident individual who is not within the Self Assessment system. In those cases, the tax is also due within 30 days. This is in line with HMRC’s latest proposal that Capital Gains Tax on all property transactions (including disposals by UK residents) will be payable within 30 days from April 2020.

The draft rules also propose that UK advisors have a responsibility to inform HMRC, within 60 days, of disposals of shares in property companies where that advisor is unable to confirm that the transaction has been reported to HMRC by the non-resident themselves. HMRC had previously tried to impose similar requirements when the residential property rules were introduced but these were widely contested and eventually withdrawn by HMRC.

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