HMRC has published draft legislation to extend the non-resident capital gains to all UK property and moving non-resident companies into corporation tax on those gains.

A policy document ‘Capital Gains Tax and Corporation Tax on gains for non-residents on UK property’ accompanies the draft Finance Bill 2019.

From April 2019:

  • Non-resident CGT (NRCGT) will be extended to all UK land and property.
  • Indirect disposals of shares in worldwide companies where at least 75% of the market value of the company’s gross assets are made up of interests in UK land will be subject to UK tax if the investor owns 25% or more of the company. There is a trading exemption where the land is used in a trade.
  • Non-resident companies that dispose of UK land or property will be moved out of CGT and into corporation tax.
  • Non-residents will be entitled to capital gains reliefs and exemptions, such as the Annual Exemption, Substantial Shareholding Exemption, and no-gain no-loss treatment for groups.
  • The taxpayer will be able to choose whether to calculate the gain or loss using:
    • The original acquisition cost
    • Rebased April 2019 value
  • Where the disposal is an indirect disposal any loss arising because the original acquisition cost method was used will be disallowed.
  • ATED-CGT will be abolished.

This follows an earlier November 2017 consultation, ‘Taxing gains made by non-residents on UK immovable property – consultation’, and HMRC’s response, ‘Taxing gains made by non-residents on UK immovable property – summary responses’ was published alongside the draft legislation and policy document.

Comments on the draft legislation are invited by 31 August 2018. The policy document and draft legislation can be read in full here. The consultation response can be found here.


Non-resident CGT: UK residential property


Taxing gains on UK immovable property - a consultation


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