From 6 April 2019 the UK Capital Gains Tax regime for non UK residents has being extended to include the disposal of all UK real estate property (residential and non-residential) as well as on the sale of shares of companies whose assets are “property rich” deriving at least 75% of their value from UK property.
The exception is that the charge on disposals of property rich companies will not apply to disposals of companies which derive their value from UK land used for trading purposes.
The intention is to remove the tax advantages which non UK residents have over UK residents by bringing all gains incurred by non UK residents on disposals of UK property within the scope of the UK Capital Gains Tax regime.
Prior to 6 April 2019 and post April 2015, non UK residents were only assessable to Capital Gains Tax on the disposal of residential UK property.
The changes have been implemented with the aim of both simplifying the rules prior to 6 April 2019, whilst also creating a more “level playing field” between investments in UK land by UK residents and non UK residents.
As with the introduction of Capital Gains Tax on non UK residents disposing of UK residential property, there is the opportunity to rebase the value of the asset as at 6 April 2019. If the rebasing as at 6 April 2019 would result in a loss on disposal, then this will not become an allowable loss.
Non UK residents disposing of UK real estate, both residential and non-residential require to be reported to HMRC within 30 days of the date of disposal. Any Capital Gains Tax also requires to be paid by this date.
There is currently an exemption from making payment within 30 days where the seller is already within the UK self-assessment tax regime and will settle their tax liability under the normal self-assessment payment deadlines, which is 31 January following the end of the tax year in which the disposal took place. This option to delay payment will be withdrawn from 6 April 2020. Any such disposals will need to be reported to HMRC and a payment on account made for the Capital Gains Tax due, within 30 days of the date of completion of the disposal.
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