Non-UK Resident Landlords; Change to Capital Gains Tax

12th August 2015

Further to a number of recent enquiries from overseas landlords (and owners of off shore companies) regarding the introduction of the New Capital Gains Tax for Non UK Resident Landlords, fresh move have researched this in depth and we have found the following salient points and a useful government link which we can pass on to you.

The new Capital Gains Tax came into force on the 6th April 2015. Any sales of UK residential property made before that date, whether of a main residence or an investment home, owned directly by non-resident individuals should not incur a tax charge. However, from 6th April 2015, a charge to CGT will arise on non-UK residents who dispose of UK residential property. The charge will only be applicable to gains accruing after 6th April 2015.

To summarise capital gains will apply: To non-UK resident individuals, trustees, certain closely-held fund structures and companies on the disposal of UK residential property, including rental properties, and Capital gains tax will be charged on the increase in value of the property from 6th April 2015 onwards. Capital Gains Tax rates of 18% and 28% apply dependent your circumstances.

The general advice seems to be that Non-UK residents should get their properties valued now, even if they have no intention of selling. Failing to get a valuation could possibly mean paying more tax when the property is eventually sold.

If you do sell in the future HMRC may query the amount of tax due on a sale and they will refer the matter to their District Valuer who will then determine the value as of the 6th of April this year. The landlord can of course employ a surveyor at that point to do the same and they will negotiate with the District Valuer. This would obviously cost more than getting your property valued now. We can arrange for a valuation on your behalf.

For further information please view the following link https://www.gov.uk/capital-gains-tax-for-non-residents-uk-residential-property

If you have any queries in relation to this please do not hesitate to contact me.

Regards

James Gardner

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