The extended CGT charge will only apply to gains accrued and realised on or after April 6, 2015. It will not apply to gains arising before this date. To calculate the charge on a property purchased before this date taxpayers may either:
- ‘rebase’ the property to its market value on April 6, 2015 (this is the default position)
- ‘time apportion’ the whole gain over the period of ownership or
- compute the gain (or loss) over the whole period of ownership.
In calculating the tax payable, non-resident individuals will have access to the annual exempt amount (£11,000 in the 2014/15 tax year), and will be able to offset any losses made on UK residential property.
How will the tax be collected?
The process of reporting and collecting the extended charge from non-residents is still to be finalised. HMRC’s current intention is that a non-resident disposing of UK residential property will need to notify HMRC within 30 days of the disposal.
Non-residents who already make an annual self-assessment return to HMRC will be able to pay amounts due as part of their next self-assessment. Other non-residents must pay during the 30 day notification period following their disposal.
What is residential property?
Residential property is property used, or suitable for use, as a dwelling, including property that is in the process of being constructed or adapted for such use. Communal residential property (including care homes, nursing homes and some types of purpose built student accommodation) will generally be excluded from the charge.