CG73960 - NRCG and the exemptions: Disposals from 6 April 2019: Computational rules for CGT from 6 April 2019

TCGA1992\Sch4AA

The computational rules apply for both direct and indirect disposals by a non-UK resident person. For an individual the provisions also apply to disposals in the overseas part of a split year.

Where the asset was acquired on 6 April 2019 or later any gain or loss is calculated under normal principles.

Where the asset was acquired before 6 April 2019, then in calculating any gain or loss, there are special rules to determine what base cost is brought into account. This is because the extension of the scope of the non-resident CG rules from 6 April 2019 means because the asset may have not been within the scope of non-resident CG (see CG73980) or was only partly (or for part of the period) within the scope of the non-resident capital gains tax charge between 6 April 2015 and 5 April 2019 (see CG73962 and CG73974).

For cases involving direct disposals of UK land the asset is not regarded as fully residential before 6 April 2019 if in the period beginning with 6 April 2015 (or acquisition if later) and ending 5 April 2019, there was no day on which the land consisted of or included a dwelling.

If the interest in land subsisted under a contract for the acquisition of land that at any time before 6 April 2019 consisted of or included a building to be constructed or adapted for use as a dwelling the disposal is taken to be fully residential before that date.

Where the asset was held but was not within the scope of the charge before 6 April 2019 in calculating the gain or loss on a disposal it is assumed that the asset was disposed of and immediately reacquired at its market value on 5 April 2019 (para 3 Sch 4AA). An example would be an indirect disposal or of a commercial property.

An election can be made for this rebasing to not apply. However, for an indirect disposal of UK land any loss arising as a result of the election is not an allowable loss (para 4 Sch 4AA).

If an election is made for rebasing not to apply and it is necessary to determine how much of a gain is a residential property gain the applicable period would start with the date of acquisition or if later 31 March 1982 (see CG73924).

If the trustees of a settlement cease to be resident in the UK after 5 April 2019, para 17 (2) prevents parts 2, 3 or 4 of Sch 4AA from applying to the disposal.