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