CG73857 - Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015 to 5 April 2019: Companies: Special rules: Computations involving companies, example
Basic information:
Interest acquired 6 April 2010 for £300,000 and disposed of 5 April 2017 for £410,000
Wholly used (or suitable for use) as a dwelling throughout ownership period
Market value at 5 April 2015 £370,000
No election made under Para 2(1)
Total number of days within post-commencement ownership period 730
Total number of days within that period where the property was used wholly or partly as a dwelling 730
Indexation factor April 2010 to April 2015 0.158
Indexation factor April 2015 to April 2017 (say) 0.023
Calculating the NRCGT gain or loss
Stage 1
Notional post-April 2015 gain or loss
Disposal proceeds £410,000
Market Value of 5 April 2015 £370,000
Indexation allowance (370,000 x 0.023) £8,510
Notional post-April 2015 gain £31,490
Stage 2
RD = 730
TD = 730
RD/TD x Notional post April 2015 gain = £31,490
NRCGT gain £31,490
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 may not be necessary for many companies.
Step 1
Determine the amount of the notional pre-April 2015 gain or loss
Market Value at 5 April 2015 £370,000
Allowable deductions
Acquisition cost £300,000
Indexation allowance (300,000 x 0.158) £47,400
Notional pre-April 2015 gain £22,600
Step 2
Determine the amount of the post-April 2015 gain remaining after the deduction of the NRCGT gain
Notional post-April 2015 gain £31,490
NRCGT gain £31,490
£0
Step 3
Not relevant as there is no post-April 2015 loss
Step 4
Add Step 1 to Step 2
Step 1 £22,600
Step 2 £0
Gain which is not an NRCGT gain £22,600
Summary
Total gain throughout ownership period £54,090
(Disposal proceeds of £410,000 less allowable deductions of £300,000 makes pre-indexation gain of £110,000, less total indexation allowance of 55,910)
Divided into:
NRCGT gain £31,490
Gain which is not an NRCGT gain £22,600
Therefore the only difference between the computation for companies and the computation for other persons is that companies are entitled to indexation allowance. This is also the case where the company makes an election for a different method of computation. However, if the gain may also be subject to ATED-related CGT, then the computation method is different – see CG73860+.