Guidance

Work out your tax if you're a non-resident selling UK property or land

Find out how to work out your taxable capital gain or loss if you're not resident in the UK and are making direct or indirect disposals of UK property or land.

Report and pay Capital Gains Tax for UK property disposal from 6 April 2020

From 6 April 2020 you need to report and pay your non-resident Capital Gains Tax if you’ve sold or disposed of UK property or land using the Capital Gains Tax on UK property service. Land for these purposes also includes any buildings on the land.

From 6 April 2020 for indirect disposals and mixed use disposals or any disposal by a personal representative continue to report through the non-resident Capital Gains Tax return.

A ‘mixed use’ property is one that has both residential and non-residential elements. For example, a flat connected to a shop, doctor’s surgery or office.

Extension of non-resident Capital Gains Tax from 6 April 2019

From 6 April 2019, non-resident Capital Gains Tax covers indirect and direct disposals of all UK property or land.

Non-resident companies from 6 April 2019

From 6 April 2019, Corporation Tax rather than Capital Gains Tax will be charged on gains from UK property or land for all non-resident companies. This includes:

  • collective investment vehicles that are deemed companies (provided they have not elected for transparent or exempt treatment)
  • life assurance companies

If you do not already submit a Corporation Tax return, you must register a non-resident company for Corporation Tax.

Non-resident Capital Gains Tax calculator

Work out what tax to pay if you’ve sold or disposed of a UK residential property since 6 April 2015.

You can use the non-resident Capital Gains Tax calculator if you’re a non-UK resident individual who’s sold or given away your entire share of a UK residential property.

You must report and make payment of tax due within 30 days of the property being conveyed. You can amend your return later if necessary.

Do not use the calculator if:

Before you start you’ll need to know:

  • your share of the property, if it’s jointly owned
  • when you became the owner of the property
  • how much you paid for the property (or your share of it)
  • the market value of the property (or your share of it) at the time you got it, if you did not buy the property yourself
  • when you stopped owning the property
  • how much you sold the property (or your share of it) for
  • the costs of any improvements you’ve made
  • your estimated UK income in the tax year you stopped owning it
  • the market value at 5 April 2015 if you owned it at that date

If you use the market value at 5 April 2015 you can only include the costs of improvements made after this date.

You can use the calculator to:

  • help you decide which method of working out the amount of chargeable gain is best for you if you owned the property at 5 April 2015
  • help you work out an amount of Private Residence Relief deductible from any calculated gain
  • take into account ‘in year’ allowable losses

Calculate Capital Gains Tax

Calculate your gain or loss for UK residential property

There are 3 ways to calculate your gain or loss:

  • using the market value at 5 April 2015
  • by working out the gain over the whole period (the date the property was acquired to the date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion – known as time apportionment
  • by working out the gain over the whole period

Rebasing from 2015

For disposals of UK residential properties by non-residents where you owned the property before 6 April 2015 the standard approach for calculating the gain is to use the market value at 5 April 2015.

  1. Establish the value of your property as of 5 April 2015 (known as ‘rebasing’).
  2. Work out the difference between the value on 5 April 2015 and the value when you disposed of the property.
  3. Deduct any costs of improving the property (enhancement costs) incurred from 5 April 2015 and the legal cost of selling the property (incidental disposal costs).

You can use the market value at 5 April 2015 (rebase) to calculate your gain or loss if you made a disposal of UK residential property after 5 April 2015 if you:

  • were either non-resident or during the overseas part of a split year
  • you meet the temporary non-residence rules

Example of the rebasing method for residential properties

Rebasing computation – gain from 5 April 2015 to disposal:

  • date of acquisition – 5 January 2011
  • acquisition costs – £500,000
  • date of disposal – 6 June 2016
Disposal proceeds £1,250,000
Incidental disposal costs £30,000
Net disposal proceeds £1,220,000
Market value at 5 April 2015 £1,000,000
Enhancement costs £0
Total cost £1,000,000
Gain over period from 5 April 2015 to disposal £220,000

Time apportionment

You can work out a simple straight-line time apportionment of the whole gain made over the period you owned the property.

Example of straight-line time apportionment for UK residential properties

Total ownership 65 months, period from 5 April 2015 to disposal (6 June 2016) was 14 months, proportion of ownership relates to period from 5 April 2015 to disposal (14/65).

Disposal proceeds £1,250,000
Incidental disposal costs £30,000
Net disposal proceeds £1,220,000
Acquisition cost £750,000
Incidental costs of acquisition £40,000
Enhancement costs £0
Total acquisition cost £790,000
Gain over period of ownership £430,000
Time apportioned post 5 April 2015 gain (430,000 × 14/65) £92,615

Gain over whole period of ownership for UK residential properties

This computation method may only be worth considering if you’ve made a loss. In the previous example the gain would be £430,000 so this method would not be beneficial. You can decide not to make an apportionment, particularly if you want to establish an amount of loss on a property.

Example of gain over whole period of ownership

Disposal proceeds £1,250,000
Incidental disposal costs £30,000
Net disposal proceeds £1,220,000
Acquisition cost £750,000
Incidental costs of acquisition £40,000
Enhancement costs £0
Total acquisition cost £790,000
Gain over period of ownership £430,000

Calculate your gain or loss for UK non-residential property or land and indirect disposals

Work out your gain or loss by either:

  • rebasing using the market value at 5 April 2019 (this is the default method)
  • working out the gain over the whole period

Rebasing from 2019

If you owned the asset before 6 April 2019, the standard approach for working out the gain is to use the market value at 5 April 2019.

  1. Establish the value of your property or asset as of 5 April 2019.
  2. Work out the difference between the value on 5 April 2019 and the value when you disposed of the property or asset.
  3. Deduct any improvement costs to the property (enhancement costs) paid from 5 April 2019. Also include the legal cost of selling the property or asset (incidental disposal costs).

You can use the market value at 5 April 2019 (rebase) to work out your gain or loss if the following apply:

  • you made an indirect disposal or a disposal of non-residential property or land after 5 April 2019
  • you were either non-resident or during the overseas part of a split year and meet the temporary non-residence rules

Example of the rebasing method

Rebasing computation – gain from 5 April 2019 to disposal:

  • date of acquisition – 1 February 2000
  • acquisition costs – £1,000,000
  • date of disposal – 1 September 2019
Disposal proceeds £3,000,000
Incidental disposal costs £50,000
Net disposal proceeds £2,950,000
Market value at 5 April 2019 £2,750,000
Enhancement costs £0
Total cost £2,750,000
Gain over period from 5 April 2019 to disposal £200,000
Gain over period of ownership £1,950,000

Gain over whole period of ownership for UK non-residential property or land and indirect disposals

This computation method may only be worth considering if you’ve made a loss. In the previous example the gain would be £1,950,000, so this method would not be beneficial.

If you make a loss using this method for indirect disposals, then the loss generated is not allowable and would give rise to a zero gain.

Mixed use apportionment

If the property was in mixed residential and non-residential use, the:

  • residential part of the gain can be rebased to 5 April 2015
  • non-residential part can be rebased to 5 April 2019

Valuations

It’s your responsibility to get an accurate valuation of the property or land. HMRC do not have a preference for how this should be done. You may want to use a professional valuer or get more than one valuation.

If you’re using the rebasing computation method it was not necessary to get a valuation in April 2015 or April 2019. You can wait until you make the disposal but it would be helpful to record what condition the property was in and any unusual features as this will help make a fair valuation.

You can ask HMRC to check your valuation by using form CG34. This check takes at least 3 months and can only be requested after disposal.

Use losses to reduce your gain

You have to report the disposal to HMRC even if you’ve made a loss.

You must use losses to reduce gains of the same year made on other UK property or land. You can carry forward unused losses to use against UK property or land disposals in a later tax year.

The exception to this rule is when you make a loss on an indirect disposal using the calculation method of gain over the whole period of ownership. The loss generated is not allowable and would give a zero gain.

If you’re an individual and your total taxable gain is above the Annual Exempt Amount (AEA), you can deduct unused losses from disposals of UK property in previous tax years. If that reduces your gain to the AEA, you can carry forward any remaining losses to a future tax year.

Changes to your residence status and losses

If you change your residence status from non-resident to UK resident you’ll be able to use unused losses on UK property or land as general losses against other chargeable gains.

If you’re a UK resident and become non-resident you’ll be able to use unused UK property or land losses against UK property or land gains you make in future.

Find out about losses when disposing assets to family and other ‘connected’ people.

Annual Exempt Amount

You only have to pay Capital Gains Tax on your overall gains above your AEA.

Check the Capital Gains Tax rates and annual tax-free allowances.

Private Residence Relief

If the property was your residence, Private Residence Relief may apply to all or part of the gain.

Disposals to which relief is available under a Double Taxation Treaty

Many of the UK’s Double Taxation Treaties can determine whether the UK have taxing rights on a disposal of UK land.

Where the Treaty applies to exempt the gain from UK taxation there remains a requirement to file the relevant UK tax return to make the claim to treaty relief.

However, where the disposal is one that has an appropriate connection to a Collective Investment Vehicle and the relevant Double Taxation Treaty would apply then HMRC is applying concessionary treatment to exempt the requirement to make the treaty claim by return. This concessionary treatment is subject to review. Appropriate connection is defined at CG73996J.

If you are not sure about whether a Double Taxation Treaty would apply to your disposal contact HMRC.

Work out your Capital Gains Tax rate

Add together all your taxable UK income and use this figure to work out your Capital Gains Tax rate.

Calculate the tax you owe

To calculate the tax you owe for the first property or land you disposed of in the tax year, if you were non-resident for the year:

  1. Work out the gain for the property or land you’ve disposed of.
  2. If you’re an individual, deduct the AEA, if applicable.
  3. Deduct any allowable non-resident Capital Gains Tax losses from an earlier year.
  4. Work out the Capital Gains Tax rate.
  5. Find out when you need to pay Capital Gains Tax as a non-resident selling UK property or land.
  6. Report and pay HMRC within 30 days of completion of disposal.

If you disposed of other properties or land in the same tax year:

  1. Work out the gain for each property or land you’ve disposed of.
  2. Deduct any unused allowable losses.
  3. Deduct any remaining AEA, taking into account if some or all of this has already been used for a disposal earlier in the tax year.
  4. Work out the Capital Gains Tax rate taking into account the amount of the rate band already used by earlier disposals in the year.
  5. Report and pay HMRC within 30 days of completion of disposal.

A property may be subject to both ATED-related Capital Gains Tax and non-resident Capital Gains Tax.

If both charges apply:

  • ATED-related Capital Gains Tax will take precedence
  • any ATED-related gain will be subject to ATED-related Capital Gains Tax at 28%
  • any remaining gains made after 5 April 2015 will be subject to non-resident Capital Gains Tax at 20%

ATED-related Capital Gains Tax will no longer apply to disposals made from 6 April 2019. Any gain made by a company from 6 April 2019 will now be liable to Corporation Tax.

If you do not already submit a Corporation Tax return, you must register a non-resident company for Corporation Tax.

Published 17 November 2015
Last updated 8 April 2020 + show all updates
  1. Report and pay Capital Gains Tax for UK property disposal from 6 April 2020 has been updated.

  2. This guide has been updated for the 2019 to 2020 tax year.

  3. Section about disposals to which relief is available under a Double Taxation Treaty has been added.

  4. The rebasing computation - gain from 5 April 2019 to disposal amounts have been updated.

  5. The guidance has been updated to reflect the extension of non-resident Capital Gains Tax to include all UK property or land, non-resident companies disposing of UK property or land now being liable to Corporation Tax and ATED-related Capital Gains Tax no longer applying from 6 April 2019.

  6. Link and associated guidance about the non-resident Capital Gains Tax calculator has been added.

  7. In paragraph calculating the tax you owe point 5 in both ordered lists and point 6 in the 2nd ordered list amended.

  8. First published.