10th October 2019

Non-resident Capital Gains Tax

From April 2019 non-UK investors, foreign companies, overseas trusts and JPUTs (Jersey Property Unit Trusts) are liable to Capital Gains Tax (CGT) from investing in UK commercial property.

What is Capital Gains Tax?

Capital Gains Tax is a tax on the profit when you sell an asset that has increased in value. You would be taxed, therefore, on the capital gain of the asset, not the amount of money you receive.

When it came into effect?

As at 6th April 2019 the changes came into force, which in essence means tax is only payable on capital gains attributable from that date.

Tax rates to be charged

• Foreign companies are subject to a corporation tax of 19% falling to 17% from April 2020
• Non-UK investors disposing commercial property are subject to a capital gains tax of 10% or 20%, depending on their marginal rate.
• Overseas trusts disposing commercial property are liable to capital gains tax of 20%.

What are the exemptions?

Real Estate Investment Trusts (REITs), overseas pension funds and certain classes of investors such as Sovereign Wealth Funds are exempt from the tax.

How we can help?

We can assist you with preparing a ‘Red Book’ compliant valuation as at 6th April 2019 for taxation purposes, ready to be submitted to the HMRC.