The Widened Scope of Non-Resident Capital Gains Tax (“NRCGT”)
Non-Resident Capital Gains Tax or NRCGT was introduced in April 2015 to charge capital gains on the disposal of UK residential property by non-UK residents to UK tax. From 6 April 2019 an extension to this was made to include all other forms of UK real property.
Non-resident individuals who now dispose of UK commercial property are subject to CGT at 10%/20% on the gain. The capital gain will be calculated using the April 2019 market value of the property. Where the gain is less when using the original base cost of the property an election can be made to tax the gain calculated using the original base cost.
This widened scope of NRCGT also applies to individuals with a substantial indirect interest in UK commercial property, i.e. a shareholding in a company that attributes 75% or more of its value from UK land.
When UK real property is sold, an online NRCGT return should be filed with HM Revenue & Customs, together with payment of any tax due, within 30 days of the sale in order to avoid penalties. However, there is an exception. If the disposer is within the Self-Assessment tax system, they can delay payment of the tax until 31 January after the end of the year in which the disposal takes place, although an NRCGT Return still has to be filed within 30 days of the completion date of the disposal.