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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Capital Gains Manual: Reliefs: Private residence relief: Computation of relief: periods away from property: specific points for NRCGT

TCGA92/S223A

From 6 April 2015 NRCGT applies when a non-resident disposes of an interest in UK residential property which is situated in the UK. Guidance on NRCGT can be found at CG73700+.

Where the interest was acquired before 6 April 2015 entitlement to aspects of private residence relief may have been established e.g. lettings relief, final period exemption. This is because the period of ownership for section 222(7) and 223(7) are different. See CG64920.

 

Example 1

Mr Jones acquires an interest in a UK residential property in 2010. He occupies this property as his residence to 5 April 2014. He then moves overseas eventually disposing of the property in 5 December 2018 when non-resident. He does not acquire an interest in any other property.

 

The NRCGT gain would normally be the gain from 6 April 2015 and final period relief would apply i.e. from 6 June 2017 to 5 December 2018.

If the property had been let after 6 April 2014 then any chargeable gain arising by reason of the letting would be eligible for lettings relief.

 

Example 2

While away from the UK the property it was let from 6 July 2015 to 5 October 2017.

The chargeable gain arising by virtue of the letting would be the gain for the period 6 July 2015 to 5 June 2017.

 

Additionally where under section 223(7) the period before 6 April 2015 is ignored a person can elect under s223A for condition A of section 223(3) to be met at an earlier date. This allows relief for a period of absence that straddles 6 April 2015 to be given. The election must be made in the NRCGT return.

 

Example 3

Same basic facts as in example 1 but Mr Jones returned to the UK on 1 May 2016 and resided at the property up to 15 November 2016, before moving overseas permanently. He was UK resident for 2016/17. Mr Jones elects on his NRCGT that condition A is met on 5 April 2014. Condition B in s223(3B) would be met on 1 May 2016.

 

The period of absence from 6 April 2015 to 1 May 2016 would now qualify for relief under s223(3)(a).

 

Example 4

Mr Jones acquires an interest in a UK residential property in 2010. He occupies this property as his residence to 5 April 2014. He then moves overseas for 5 years and returns to the property on 6 April 2019. While overseas he did not acquire an interest in any other property. He continues to live there until 5/4/19 when he leaves the UK permanently. He disposes of the property on 15 October 2020 when non-resident.

Mr Jones makes an election under s223A(2) so that condition A is met on 5 April 2014.

The period of absence from 6 April 2015 to 5 April 2017 would qualify for relief under s223(3)(a).