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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15986
Experience:  International tax
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A company sells a property and thereby makes a capital

Resolved Question:

Hi
A company sells a property and thereby makes a capital gain.
However, if the sole director of the company is non-resident in the UK, are there any circumstances where he would be exempt from paying capital gains tax in the UK?
Thanks
Paul
Submitted: 2 years ago.
Category: Tax
Expert:  TaxRobin replied 2 years ago.
Hello and thank you for allowing me to assist you.
Not if the property was located in the UK.
There will be exclusions for certain types of property in communal use, e.g. boarding schools, nursing homes and certain types of student accommodation.
The charge will apply to gains made by individuals, trustees and closely held non-resident companies.
Principal private residence relief (PPR) will be available in appropriate circumstances. A non resident of the UK is not going to be able to show that a property in the UK was their principal residence.
Customer: replied 2 years ago.

Does it make any difference if the property is in the name of the individual or the company?

Thanks

Paul

Expert:  TaxRobin replied 2 years ago.
The rate will be different.
Companies would pay a rate of 20% and individuals would be 18% or 28%.
Even a foreign company will be paying the CGT if they sale UK property.
Customer: replied 2 years ago.

Finally, would there be any relief available if the property was purchased many years ago?

Thanks

Paul

Expert:  TaxRobin replied 2 years ago.
No there is no relief for excluding just because the property was held long term unfortunately.
Customer: replied 2 years ago.

Any refurbishment to the property can be offset against the sale. Is that correct?

Thanks

Paul

Expert:  TaxRobin replied 2 years ago.
Improvements are a part of the formula when calculating the gain, that is correct.
If you owned it before April 1982 you do use Market Value in 1982 as your starting point. You asked about owning for many years and I said there was no exclusion but i really would have done better to advise about this.
You can deduct certain costs of buying, selling or improving your asset from your gain.
Costs you can deduct include:
fees, for valuing or advertising assets
costs to improve assets (but not normal repairs)
Stamp Duty Land Tax and VAT (unless you can reclaim the VAT)
Customer: replied 2 years ago.

How do you calculate the Market Value in 1982?

Expert:  TaxRobin replied 2 years ago.
You would need to have a professional assess the value for 1982 market value.
If you value an asset when working out your Capital Gains Tax liability or, for companies, your Corporation Tax liability on chargeable gains, you can use form CG34 to ask HMRC to check your valuation. If they agree your valuation HMRC will not challenge your use of it in your return.
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