Non-resident UK property owners warned of tax change

A tax change due to take effect from next month means that it will be compulsory for all non-UK residents must pay tax on all UK land disposals, both residential and commercial.

As a result of this, the Association of Taxation Technicians (ATT) is warning all non-UK residents who sell any UK land or property, that they must file a non-resident Capital Gains Tax return and pay any tax due within 30 days of the sale.

While non-UK residents selling a residential property have been liable to UK tax and required to file a tax return with HM Revenue & Customs (HMRC) within 30 days of sale since 6 April 2015, the rules are being extended.

From 6 April 2019, these rules will cover all sales of UK land and property, including commercial, as well as disposals of substantial interests in companies which are ‘UK property-rich’.

Commenting, ATT co-chair of the technical steering group John Stride said: ““Any non-UK resident who owns an interest in UK land or property needs to be aware of these significant changes. In particular, those looking to sell need to be aware that they will have to file a non-resident Capital Gains Tax return with HMRC and pay any tax due, in a very short time frame.

“For disposals of commercial property and indirect disposals, only an increase in value after 6 April 2019 will be subject to tax. This means that, in the short term at least, any tax due on such disposals is likely to be minimal. But even if there is no tax due, or a property is sold at a loss, there is still a requirement to file a non-resident Capital Gains Tax return within 30 days or face penalties.”

Stride urged those non-UK residents that hold UK commercial land or property to consider getting their property valued as at 6 April 2019, regardless of whether they are anticipating a future sale, as the value at that date would be used to calculate the taxable gain.

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