CG73791 - Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015 to 5 April 2019: Individuals: Special rules, and computation: Straight-line apportionment computation, examples

1. Property a residential property throughout ownership

2. Property not always a residential property

1. Property a residential property throughout ownership

Basic information:

Interest acquired 6 April 2013 for £300,000 and disposed of 5 April 2017 for £410,000.

Wholly or partly used as (or suitable for use as) a dwelling throughout ownership period

Election made under Para 2(1)(a)

Total number of days in post-commencement ownership period 730

Total number of days within that period where the property was used wholly or partly as a dwelling 730

Total number of days in the ownership period 1,460

Calculating the NRCGT gain or loss

Stage 1

Step 1 – Gain or loss on disposal

Disposal proceeds £410,000

Allowable deductions £300,000

Gain on disposal £110,000

Step 2 – Notional post-April 2015 gain

PCD = 730

TD = 1,460

PCD/TD x gain on disposal = £55,000

Step 3 – Notional pre-April 2015 gain

TD-PCD/TD x gain on disposal = £55,000

Stage 2

RD = 730

TD = 730

RD/TD x Notional post-April 2015 gain = £55,000

NRCGT gain £55,000

Calculating the gain or loss which is not an NRCGT gain or loss

The part of the gain which is not an NRCGT gain will not be subject to charge unless it is brought into charge by other provisions. This second part of the computation will therefore not be strictly necessary for many people.

Step 1 – Determine the amount of the notional pre-April 2015 gain or loss

Taken from step 3 above £55,000

Step 2 – Determine the amount of the post-April 2015 gain remaining after the deduction of the NRCGT gain

Notional post-April 2015 gain £55,000

NRCGT gain £55,000

£0

Step 3

Not relevant as there is no post-April 2015 loss

Step 4 – Add Step 1 to Step 2

Step 1 £55,000

Step 2 £0

Gain which is not an NRCGT gain £55,000

Summary

Total gain throughout ownership period £110,000

(Disposal proceeds of £410,000 less allowable deductions of £300,000)

Divided into:

NRCGT gain £55,000

Gain which is not an NRCGT gain £55,000

2. Property not always a residential property

Basic information:

The same as example 1 except property is only wholly or partly used (or suitable for use) as a dwelling for 1 out of the 2 post-April 2015 years

Total number of days in post-commencement ownership period 730

Total number of days within that period where the property was used wholly or partly as a dwelling 365

Total number of days in the ownership period 1,460

Calculating the NRCGT gain or loss

Stage 1

Step 1 – Gain or loss on disposal

Disposal proceeds £410,000

Allowable deductions £300,000

Gain on disposal £110,000

Step 2 – Notional post-April 2015 gain

PCD = 730

TD = 1,460

PCD/TD x gain on disposal = £55,000

Step 3 – Notional pre-April 2015 gain

TD-PCD/TD x gain on disposal = £55,000

Stage 2

RD = 365

TD = 730

RD/TD x Notional post-April 2015 gain = £27,500

NRCGT gain £27,500*

*If there was mixed use of the property in the post-commencement ownership period, the NRCGT gain (or loss) would need to be further apportioned on a just and reasonable basis.

Calculating the gain or loss which is not an NRCGT gain or loss

Step 1 – Determine the amount of the notional pre-April 2015 gain or loss

Taken from step 3 above £55,000

Step 2 – Determine the amount of the post-April 2015 gain remaining after the deduction of the NRCGT gain

Notional post-April 2015 gain £55,000

NRCGT gain £27,500

£27,500

Step 3

Not relevant as there is no post-April 2015 loss

Step 4 – Add Step 1 to Step 2

Step 1 £55,000

Step 2 £27,500

Gain which is not an NRCGT gain £82,500

Summary

Total gain throughout ownership period £110,000

(Disposal proceeds of £410,000 less allowable deductions of £300,000)

Divided into:

NRCGT gain £27,500

Gain which is not an NRCGT gain £82,500