Non-Resident Individuals selling UK residential property - Reporting to the UK Tax Authority

Common misconceptions:

1. There is no need to pay Capital Gains Tax (“CGT”) as I don’t live in the UK.
2. There is no need to report the sale to HMRC as I sold my property at a loss.
3. There is no need to report the sale / transfer to HMRC as I didn’t receive any money.

 Since 6 April 2015 non UK residents have been required to report disposals of UK residential property within 30 days after  the disposal.  Their capital gains are restricted to the uplift in value since that date.

 On 6 April 2019 this was extended to cover non-residential UK property and only again in relation to the uplift in value since that date. 

 During this time it has always been possible for non-residents to defer payment of the tax until 31 January following the end of the tax year of disposal if they complete a Self-Assessment Tax Return.

 From 6 April 2020 it is no longer possible to defer the tax, and payment of any liability is due at the same time as the submission of the Property Tax Return.  This brings the reporting requirements into line with those for UK residents selling UK residential property.  Where the requirements differ is that non-residents must still report all UK property disposals regardless of whether a loss arises or the gain is covered by exemptions or reliefs.

 Non-residents selling UK land and property are entitled to a UK capital gains tax annual exemption, £12,300 for 2020/21.

 HM Revenue & Customs will impose late filing penalties if the filing deadline is missed and will impose interest if payment of the tax is made late.

How we can help?

We are here to help you and make this process as simple as possible. We are approachable and can assist with any CGT related queries you have which can include:-

1.  Determining whether you are non UK Resident for tax purposes;
2.  Guiding you through the procedure and explaining which costs can reduce the tax charge;
3.  Advising you on utilising any available tax reliefs and exemptions to reduce the tax charge;
4.  Calculating the tax charge using the methods available and using the one which is most favourable to you;
5.  Advising on Double Tax Treaties in relation to your country of residence and the UK;
6.  Preparing and submitting the Property Tax Return to HMRC timeously to avoid your exposure to the penalties.

 Please contact Collette Kerr on 0131 247 1037 or collette.kerr@morton-fraser.com.