Capital Gains Tax Payable by Non-UK Residents

 

Historically properties in the UK owned by non-UK Residents did not incur Capital Gains Tax (CGT). However, from April 6th 2015 non UK residents will now be subject to CGT on disposal of assets including property. Any gain made prior to 6th April 2015 will not be chargeable. We recommend that non-UK residents should have their properties valued as at 5th April 2015 for use in future CGT calculations in the event a disposal is ever made in the future.

The alternative would be to commission a retrospective valuation as at 5thApril 2015 following a disposal which may not arise for many years. Retrospective valuations are typically less robust than market valuations that were prepared contemporaneously (with associated notes and photographs) and, as a result they may be less capable of withstanding challenge by Her Majesty’s Revenue & Customs (HMRC). The are also generally more expensive to commission as the require greater and retrospective research.

Example

Take a property worth £1.5 million in April 2015.The property is sold five years later for £2 million.

Sale price in 2020 £2,000,000
Property Value on 5th April 2015 (£1,500,000)
Capital Gain from 6th April 2015 £500,000
Capital Gains Tax payable (Based on 28% of Gain) £140,000

*** The above is a generic illustration and the tax payable will depend on individual circumstances as various reliefs may apply including private residence relief and lettings relief.

Newman Webb are Chartered Surveyors and Valuers that specialise in providing property valuations. Our valuations are prepared in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation Standards. We have carried out over 100 valuations for clients in respect of non-Resident CGT working alongside their accountants to mitigate the amount of tax payable.

If you would like to discuss any matters with us or arrange a valuation of your property you are welcome to give us a call on 020 8945 5474 or drop us an email at info@newmanwebb.co.uk.

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