CG73704 - Non-Resident Capital Gains Tax (NRCGT) - Disposals on or after 6 April 2015: Introduction: Some key features of new legislation
FA2015/S37 and FA2015/Sch 7 enact the provisions that extend CGT to chargeable gains accruing to non-UK resident persons on the disposal of an interest in UK residential property. The legislation refers to this as "non-resident CGT" or "NRCGT".
FA2015/S37 confirms that the scope of the provisions also covers individuals in the overseas part of a split year. Guidance on the Statutory Residence Test and what amounts to a split-year can be found in the RDR3: Statutory residence Test.
FA2015/Sch 7 introduces substantial new provisions, and also makes extensive changes to existing rules in TCGA92, TMA70 and other statute. The legislation broadly aims to make the liability to CGT of a non-resident the same as that of a UK resident disposing of a similar asset on similar terms.
- charge to tax
TCGA92/S1(2A) (as amended by FA2015/Sch7/para 1) imposes on non-resident companies the new charge to non-resident CGT. They are charged to CGT, and not CT, to the extent that the gains are non-resident CGT gains. The legislation sets out various exemptions that can be claimed.
- annual exempt amount
TCGA92/S3 contains provisions in new subsections (5BA) and (5D) which make the annual exempt amount available against a person's net chargeable NRCGT gains for a tax year. If it is a split year for an individual only one annual exempt amount is available for the year.
- rates of CGT
TCGA92/S4 provides that the rate of CGT for chargeable NRCGT gains accruing to a company is 20%. Otherwise non-resident CGT is applied at the same rates as ordinary CGT for UK residents, see CG10245.
When determining the rate of non-resident CGT for individuals, consideration is taken in the same way as for UK residents of the amount of income taxable in the UK.
- commencement
FA2015/Sch 7/para 61 provides that the amendments made by Sch 7 have effect from 6 April 2015 in respect of disposals made on or after that date.