HMRC have extended the regulations relating to the disposal of UK land by non-residents – to commercial property.
These rules may apply to you, as a non resident, owning residential property in the UK, should you sell UK property.
Disposal covers not only sale of property but also disposals by way of transfer or gift.
NOTIFICATION
From 6 April 2015 HMRC required a notification to be made online within 30 days of the date of the conveyance of the property. From 6 April 2019 this requirement extends to commercial property.
CALCULATION OF THE GAIN
The gain on the disposal of UK residential property arising from the value of the property as at 6 April 2015 is chargeable to Capital Gains Tax and there is a choice as to how that gain is calculated – which we will calculate for you as and when you are considering selling a property.
Currently the rate of Capital Gains Tax payable is linked to your total taxable UK income and would be charged at either 18% or 28% and you would be eligible for the annual Capital Gains Tax exemption.
The Capital Gain on the sale of commercial property will be calculated on the difference between the sale proceeds and the value of the property at 6 April 2019.
CAPITAL GAINS TAX PAYMENT
Any Capital Gains Tax payable because of the disposal must be paid to HMRC within 30 days of disposal unless you are submitting annual Self Assessment Returns in which case payment of the Capital Gains Tax can be included on the tax payable on the 31 January in the year following the disposal.
The online notification applies irrespective of the submission of annual Self Assessment Returns and applies even if there is no Capital Gains Tax payable or the property is sold at a loss.
HMRC will charge penalties both for non or late online notifications and late payment of tax due.
IMPACT OF FINANCE ACT 2019
Changes introduced in the Finance Act 2019 apply to disposals of UK property by a non resident owner such that any Capital Gains Tax payable must be paid within 30 days of the conveyance of the property.
Of necessity this will be a provisional calculation as the liability to Capital Gains Tax may be subject to reduction by losses incurred later in the year.
Put simply, this means that the ability to delay payment until the 31 January in the year following the date of disposal is removed.
The disposal will remain reportable on the Self Assessment Return for the year of disposal when any adjustment to the provisional Capital Gain calculated can be applied.
FURTHER NEWS
Consultations on the practical application of the changes announced in Finance Act 2019 are ongoing and we will keep you advised of any significant news on the above.
Contact us at team@sbnta.com if you want to discuss this or if you have any queries.
SBN Tax & Accounts Services Ltd 