As from 6 April 2015, non residents are liable to UK capital gains tax (CGT) on the sale of residential dwellings situated in the UK. This change was implemented in order to bring the UK in line with many other countries, with an established pattern of taxing property situated in their jurisdiction.
It is important to note that the new rules only seek to tax the proportion of the gain that accrues from 6 April 2015.
The new rules brought with it a new set of reporting requirements.
- Deadline: reporting and paying the CGT charge
The disposal must be reported to HMRC within 30 days of conveyance of the property, even if there is no liability to tax. Once the report has been made, HMRC will email a payment reference, together with details on how to make payment.
A separate report must be filed with HMRC for each property sold post 5 April 2015, irrespective as to whether a taxpayer is registered for self assessment. The report is made by completing an online form with HMRC.
A detailed CGT calculation must accompany each capital gain or loss reported.
The CGT must be paid after the conveyance.
- Self Assessment
If a taxpayer is registered for self assessment, a report still needs to be filed within 30 days of conveyance of the property, again, using HMRC’s online form. The CGT charge can then be paid once HMRC has issued a payment reference number.
At the time of filing the report, a taxpayer who self assesses can elect to pay any CGT that is due as part of their normal self assessment end of year tax payment, as opposed to shortly after conveyance.
The property disposal will still need to be disclosed on the Capital Gains schedule to the tax return.
Article Courtesy of: www.wardwilliams.co.uk