Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Change in Capital Gains Tax Rules for Non-UK Resident Landlords

Last month – 6th April 2015. the legislation concerning Capital Gains Tax (CGT) for Non-UK resident landlords came into force, which may seriously affect Non-UK property owners when it becomes time to sell their property assets in the UK.

Any sale of residential properties in the UK concluded before the date of the legislation change, whether the property concerned was a main residence or an investment property and owned by Non-UK resident, should not incur any additional tax charges. Now Capital Gains Tax will be charged to Non-UK resident landlords who decide to dispose of their UK property assets after that date and Capital Gains tax will be charged on the increase in value of the property from 6th April 2015 onwards,

Capital Gains Tax may be payable on UK residential property disposals by:

  • Non-resident individuals
  • Personal representatives of non-residents who have died
  • Any non-residents who are partners in a partnership
  • Non-resident trustees
  • Non-resident companies or funds

If a property was jointly owned by separate individuals or partnerships, then each individual owner must tell HMRC about their own financial gain or loss.

To find out more about disposing of a property asset please click here to visit the Government website.

Different rules apply if you are temporarily non-resident in the UK as you may also have to pay Capital Gains Tax on gains made on disposals of other types of UK assets, such as company shares.

Capital Gains Tax rates of 18% and 28% will apply dependent on the personal circumstances of the Non-UK resident property owner.

All Non-UK resident landlords should get their rental properties valued now, even if there is no intention to sell at the moment, because failing to get a current valuation now, could possibly mean paying more Capital Gains tax when the property is eventually sold.

It is possible that HMRC could query the values of properties owned by Non-UK residents dating back to the 6th April 2015 and getting a new valuation could mean that Non-UK resident landlords avoid additional hassle and further expense in retrospectively arguing over the increase in value of their properties.

Click the link below to visit the Government’s own website for further information on Capital Gains Tax for Non UK Residents:

https://www.gov.uk/capital-gains-tax-for-non-residents-uk-residential-property

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