UK Capital Gains Tax on Residential Property Sold by Non-Resident Individuals – Reporting to HMRC

Jane Cooper 18 August, 2015

As reported in our previous blog the sale of UK residential property by non-resident individuals from the 6th of April, 2015 is now subject to capital gains tax in the UK.

The capital gains tax liability is to be computed with reference to the value of the property on the same date (or the cost of the property, if acquired on or after the 6th of April, 2015), with the CGT Annual Exemption (£11,100 for 2015/16) available for each individual with an interest in the sold property.

Importantly, there is now a requirement to report the disposal to HM Revenue within 30 days of the disposal of the property, whether or not any tax is payable.

The date of the disposal is usually the date of exchange of contracts.

The reporting of the disposal to HM Revenue is done online, using the form available here.

Payment of any capital gains tax on the sale of the property is to be made when the disposal is reported – or it can be deferred to a later date if the individual selling the property is already within the Self Assessment regime and will be lodging a UK tax return for the tax year of the disposal.

Many non-UK resident individuals who are selling their UK property are already lodging UK tax returns annually, as they have been letting the property and reporting their rental income and expenses. Such individuals will therefore be able to defer the payment of any CGT on the disposal, but must not overlook the requirement to report the sale within the 30-day deadline.