From 6 April 2015 non-UK resident individuals, trusts, personal representatives and narrowly controlled companies became subject to capital gains tax on gains arising on the disposal of UK residential property on or after that date. Only the gains relating to the period from 5 April 2015 will be taxable. In this regard, the gains will be calculated using one of two methods.
The first is based on the proceeds less the market value at 5 April 2015. The second method involves carrying out simple straight line time apportionment of the whole gain obtained over the period of ownership. The taxpayer may choose which method to use. Non-resident individuals will be subject to tax at the same rates as UK taxpayers (28% or 18% on gains above the annual exemption). Non-resident companies will be subject to tax at the same rates as UK corporates (20%).
Some Principal Private Residence (‘PPR’) relief may be available to non-residents if the property is or has ever been the owner’s only or main residence . This may partially exempt some of the gains arising. However, the rules relating to PPR have been modified to take into account potential claims by non-residents. From 6 April 2015 a person’s residence will not be eligible for PPR for a tax year unless either the person making the disposal was resident in the same country as the property for that tax year, or the person spent at least 90 midnights in that property.’
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