Owning property or other assets in the UK while living abroad carries some tax liabilities. Maybe the most significant of these is Capital Gains Tax (CGT) — tax on the gain made on the disposal of an asset that has increased in value. For expats and non-UK residents, the CGT rules have evolved in recent years, so it is wise to stay up to date.
Before 2015, non-residents were typically exempt from UK CGT on the sale of property. However, the new changes have imposed most foreign property owners with the obligation to pay UK tax. Today, non-residents who are disposing of UK land and property must report and even pay CGT under tight deadlines.
When Does CGT Apply to Non-Residents
If you’re a non-UK resident selling UK residential or commercial property, you’re required to report the disposal to HMRC, regardless of whether there’s a tax liability. This rule applies to both individuals and non-resident companies.
From 6 April 2019, CGT is extended to all assets of UK property, including indirect disposals, such as sale of shares in a company of which 75% or more of its value derives from UK land. Tax is charged on gains made after either April 2015 (residential property) or April 2019 (other possessions).
How to Report and Pay CGT
Non-residents must report all disposal of UK property within 60 days from the date it’s done. Whether or not you have tax to pay. You can report it using HMRC’s online CGT service and should make the payment due in the same 60-day period.
You will need such details as purchase and sale prices, costs related to them, and any relevant reliefs or allowances. Having accurate records is key to enable proper reporting and prevent late submission penalties.
Practical Considerations
Because of the complexity of valuations, exchange rates, and reliefs like Private Residence Relief or Lettings Relief, many non-residents obtain UK tax adviser services. Professional guidance from firms like UK Property Accountants ensures correct reporting requirements and the identification of acceptable means of reducing tax liabilities.
Proactive management of your CGT as a non-resident keeps you in compliance with UK taxation policy while protecting your investment returns.
Conclusion
Non resident capital gains tax have tightened in recent years. From the sale of a resident property, business unit, or shares in a UK property-related business, both payment and reporting are required on time. Staying current and seeking professional advice where necessary can be expensive and prevent unnecessary penalties.
