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bigduckontax
bigduckontax, Accountant
Category: Tax
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A non resident individual owns three flats in london. The rent

Customer Question

A non resident individual owns three flats in london. The rent is reported on his SA tax return to the Uk tax authorities and he pays the related income tax. He also completes the annual non- resident return. He lives in a EU country and therefore claims the personal allowance annually against the rental income.

He now wants to sell one of the flats and there will be a sizeable profit/capital gain.

Will he be liable to pay Capital gains Tax on the gain arising?
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Providing that he has not been resident in the UK for the 5 years before the exchange of contracts for the sale then any gain should be outside the scope of UK Capital Gains Tax (CGT) and there will be nothing to pay. However, the gain may still be taxable under the tax regime of the country in which he is living.

Here is the HMRC guidance [edited] on the subject:

'Tax on capital gains from assets in the UK

If you're not resident in the UK, whether you pay CGT on UK assets will depend on a number of factors:

If you have previously lived in the UK, and if so, when you left the UK, the period of time you were resident in the UK before your departure and the length of time you live abroad. [remember I said 5 years, see my answer]

Whether the assets are held for the purpose of carrying out work through a UK branch or agency.'

I do hope that I have been able to shine some light on your question.

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