Non residents to pay tax on UK residential property


Following the closure of the consultation period, HMRC has confirmed that from 6 April 2015 non UK residents will pay capital gains tax on gains arising on the disposal of UK residential property.  This measure will be particularly relevant for UK individuals who have moved abroad but retained property in the UK. Currently the sale of such properties is outside the scope of capital gains tax, but under the new rules the property will fall into charge.

Tax will be payable within 30 days of conveyancing, unless the person currently falls within the UK self-assessment system in which case tax will fall due on the normal date.

Principle private residence relief (PPR) provides relief against a capital gains tax charge on the disposal of a person’s home.  Non residents may be able to benefit from the relief but the rules are also being tightened to prevent the relief being used to extinguish a tax charge on a property that is not in fact a home.

The changes to PPR also affect UK residents who own property abroad – broadly speaking, 90 days must be spent in the overseas property in a year for it to be capable of being considered a home.

If you are concerned how these new rules may affect you, contact our Tax Experts on 0845 177 5500 or use our on-line contact form for a free initial consultation.

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