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03 Apr 2019

Non-resident capital gains tax: the new regime

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The UK has introduced new rules which radically change the tax landscape for non-residents investing in UK property.

Prior to the introduction of the new rules, a non-resident would have been outside the scope of UK tax on chargeable gains on the disposal of a UK commercial investment property or a disposal of shares or units in a property-owning SPV.

But under the new rules, which apply from 6 April 2019, non-residents will now be subject to UK tax on chargeable gains on both:

  • direct disposals of UK land; and
  • indirect disposals of UK land.

A direct disposal simply means a disposal of a direct interest in UK land (including disposals through tax transparent partnerships).

An indirect disposal is a disposal of shares or units in a company or other relevant entity that is "UK property rich". A company or other entity is UK property rich if 75% or more of its gross asset value derives directly or indirectly from interests in UK land. In applying this 75% gross asset value test, value can be traced to UK land interests through any number of entities in a property holding structure.

Click here to read more.

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