A capital gains tax (CGT) charge on the sale of UK residential property by non-UK residents was introduced in April 2015. Only the amount of the overall gain relating to the period after 5 April 2015 is chargeable to tax.
In certain circumstances private residence relief may apply where a property is the owner’s only or main residence. For example, you don’t usually pay any tax for any tax years in which you, your spouse or civil partner spent at least 90 days in your UK home. In most cases, the final 18 months of ownership usually qualifies for full tax relief.
A UK non-resident that sells UK residential property needs to inform HMRC within 30 days of transferring ownership of a relevant property (known as conveyancing). The notification must be made whether or not there is any non-resident CGT to be paid.
The return must be made using the non-resident capital gains tax return online form even if there is a loss on the disposal or if the taxpayer is required to report the disposal on their own personal or corporation tax self-assessment tax return.
Any non-resident CGT charge applicable is applied at different rates according to whether the seller is a non-resident individual, personal representative, trustee closely-held company or fund. Any non-resident CGT that is due must also be paid within 30 days of the conveyance date.
If the taxpayer is registered for UK tax they can opt to pay the non-resident CGT due when they submit their regular self assessment return. There are penalties for failing to file the non-resident CGT return within the deadline as well as for failing to pay any tax due on time.