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bigduckontax, Accountant
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Non Resident is Selling a Non Residential Property in the UK:

Customer Question

Non Resident is Selling a Non Residential Property in the UK: WHAT IS THE Capital Gains Tax implication?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I'm Keith and happy to help you with your question.
Assuming that the non resident has not been resident in the UK for five whole tax years then this transaction would escape UK Capital Gains Tax as it is non-residential property. The 2015 changes apply only to residential. You can read all about this in the very comprehensive summary here:
http://www.wragge-law.com/insights/capital-gains-tax-for-non-residents-disposing-of-uk-residential-property-updated-proposals/
It is a good read for a wet Sunday Afternoon.
I do hope I have been able to set your mind at rest on this matter.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3114
Experience: FCCA FCMA CGMA ACIS
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 1 year ago.

Thank you for your support.

As an afterthought, there may of course be a liability to tax in the jurisdiction in which the vendor is resident.

Expert:  Sam replied 1 year ago.

Hi

I am Sam and I have a differing opinion

I am afraid the legislation is set to change after 05/04/2015 - so maybe you need to consider a sale before that date or be aware that any sale after 05/04/2015 - will have the gain accrued from 6th April 2015 to the actual sale date - as arising in the UK and liable to capital gains tax.I have added the legislation here which offers the advise of the frequently Q & A re this new legislation - which will be added officially onto the HMRC website after 05/04/2015 - when its legislation implemented. Let me know if you have any follow up questions

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413988/capital-gains-tax-non-uk-res.pdf

This relates to all property - when you are a non resident

Thanks

Sam

Expert:  bigduckontax replied 1 year ago.
Yes, the rules do change with the 15/16 tax year, but the link provided by my colleague emphasisies that it applies to residential property only.
Expert:  Sam replied 1 year ago.

Hi

Sorry to defer again to the new legisaltion but it applies to all property when the individual is not resident - the FAQ only makes reference to homes to make the advise easier to follow -

However - as an afterthought - if you have this non residential property - were you collecting rents on it - or using it within a trade - as there may be some further reliefs that might apply if a liability arises through a post 6th April sale or a remianing liability of used within a tarde setting, and that you have a compoany here in the UK

Thanks

Sam

Expert:  bigduckontax replied 1 year ago.

By rental income my colleague appears to be attempting to draw your attention to Lettings Relief. In any event this is merely of academic interest.

The new rules apply only to residential property disposed of by non residents post April 2015. This is reiterated all over the net. Apart from Gov UK web sites have a look for example at the advice from Berkeley Law, Solicitors, you will find it here:

http://www.berkeley-law.com/downloads/update-to-the-uk-capital-gains-tax-on-non-uk-residents-april-2014.pdf

It says exactly the same.

Expert:  Sam replied 1 year ago.

Hi

I was refering to entreprenuers releif or business asset roll over releif to name a few

Thanks

Sam

Expert:  bigduckontax replied 1 year ago.
whilst these reliefs are perfectly correct they will not be needed for the reasons repeatedly advised in my answers..
Expert:  Sam replied 1 year ago.

Hi

HMRC state that

2.5 In this respect, the CGT charge on non-residents will differ from the approach the government has introduced for enveloped property where ATED and the ATED-related CGT charge1do not apply to property rental businesses. For the measures introduced as part of the ATED regime, it was appropriate to exclude genuine businesses from the scope of the charge, as the main focus was the avoidance of SDLT through holding property in corporate envelopes.

Business property is excluded as

1) It usually is treated as an asset of any trading business so subject to Corporation tax (if a Limited company) and Capital gains tax (if sole tarder or partnership) or

20 if no exisitng tarde then the normal capital gains regime applies to the disposal of the property whether you are a resident or not as its commercial property.

I would advsie you write to HMRC for a formal ruling as this is not fair on you at all and I would hate to see you mot pay what is due - and end up with problems with any tax and penalties owed or any future visit to the UK and all I want is for you to get the correct information

I advsie you write an email to the Non Resident team

Link here for the options

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-and-capital-gains-tax-enquiries-for-non-uk-residents

Thanks

Sam

Expert:  bigduckontax replied 1 year ago.
The web is littered with advice from prestigious professional practices on this matter and all emphasise that the revised rules apply to residential or residential type properties only. Whilst I accept that this may change in the future as the situation now stands non residents are not liable to UK CGT on non residential premises. I appreciate that the policy appears lop sided, but that is the way it is, not unusual in UK taxation.

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