Capital Gains Tax (CGT) Leaving The UK and Non-Residents


Simon Misiewicz

18th May 2017

By Louise Misiewicz

Are you thinking of disposing of any properties?

Are you thinking of leaving the UK?

I have written extensively about Capital Gains Tax (CGT) and tax planning in previous articles.

However, the government made a change in 2016 to the extent that CGT is calculated differently for those leaving the UK. The government have put in place a new piece of legislation that requires CGT to be paid after 5th April 2015 for all non-UK residents. My team of property tax specialists can also advise you further on this.

This was put in place to prevent non-UK residents having the ability to avoid CGT, in contrast to UK residents that have to pay tax. However, this also means that people who previously lived in the UK would also pay CGT if they have left the country.

Non-resident gains or losses may arise if you dispose of a UK residential property and as such may need to report any CGT due. This may be done using the government online form. You would use this return if you have disposed of the whole or part of an interest in a UK residential property in the years 6th April 2015 to 5th April 2016, 6th April 2016 to 5th April 2017 or 6th April 2017 to 5th April 2018 when either non-resident or UK resident but the disposal was in the overseas part of a split year.

However, you do not need to complete the form if you have previously completed a self-assessment in previous tax years. I wrote a useful article here on here to offset property losses to offset income tax liability which is also worth reviewing when looking at overall tax liabilities in 2017.

Calculating CGT for non-UK residents

There are different methods of calculating CGT for non-residents, including:

  • Market value as at 5th April 2015
  • Value at sale
  • Value spread evenly from the point of sale and point of purchase (straight line method). For example, you would have owned the property for 60 months (five years) if you purchased the property in January 2011 for £200,000 and sold the property at Decembermebr 2015.

You can also work out how much tax you need to pay by using the HMRC’s online calculator.

Filing CGT returns within 30 days

As a result of the legislation changes, non-UK residents will have to inform HMRC within 30 days that they have sold a property so that the CGT calculation can be performed and then paid.

I have written a useful article here on selling properties as a one-off and CGT implications. There’s also relevant details here on changes introduced around Private Residence Relief for non-UK residents.

The series of articles here on selling properties, CGT, transferring properties, and tax planning will assist property landlords in navigating around the issues raised.

My team of property tax experts are on hand to best advise you on how to understand CTG.

How to engage with us

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