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It’s a capital gain for HMRC

Author: Henry Ejdelbaum

Tags: Accountants, accounting, business, Capital Gains, CGT, hmrc, Non-resident, Resident, Tax

Historically, the only people subject to Capital Gains Tax (CGT) in the UK were residents, temporary non-residents (on a trip up to 5 years) and UK companies.

The Treasury saw a gap, and, in April 2015, non-resident CGT was introduced. These take precedent over the old temporary non-residents rules and apply solely to gains and losses pertaining to residential property owned by non-residents. At face value it’s pretty straightforward, but, as you’ve probably guessed already, it really isn’t.

HMRC giveth; while closing the loophole for non-residents to pay no CGT on residential property, they have been very kind in allowing the tax payer to choose the lowest of the three calculations that can be made. Broadly speaking, only gains accrued after 5 April 2015 should be taxed, but you do have to careful as each method can produce wildly different results.

HMRC taketh away; HMRC only allows 30 days for the submission of the return and to pay the tax. The standard penalties for non-payment also apply despite the short timescales. This becomes yet more complicated by the fact that you may not know your residency status at the date of the sale, as the residency test looks back over the tax year to determine this after the fact.

If you’ve got a concern regarding any potential CGT issues, regardless of your residency, you should get in touch with an accountant who likes tax.