Non-resident Capital Gains

Featuring Lisa Macpherson | 22nd November, 2017

The government announced at the autumn Budget that from April 2019 tax will be charged on gains made by non-residents on disposals of all types of UK immovable property, extending the existing rules that currently apply only to residential property.

This measure expands the scope of the UK’s tax base with regard to disposals of immovable property by non-residents in two key ways:

  • All non-resident persons’ gains on disposals of interests in UK land will be chargeable
  • Indirect disposals of UK land will be chargeable

These changes will more closely align the tax treatment of non-UK resident owners of UK immovable property with that of UK residents, and reduce the incentive for multinational groups to hold UK property through offshore structures, often in low tax or no tax jurisdictions. The proposals represent a significant change to the rules for taxing chargeable gains on immovable property. Whilst some aspects of the reforms are fixed, such as who is in scope, the commencement date applying to gains on disposals occurring on or after 1 April 2019 (for companies) or 6 April 2019 (for other persons), and core features of the direct and indirect disposal provisions, however the government will consult to ensure that the legislation is effectively targeted and does not place unnecessary burdens on affected taxpayers.

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