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HMRC internal manual

Capital Gains Manual

Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015: Interaction between Non-Resident CGT and ATED-related CGT: Disposal of assets held at 5 April 2015 (where no election made and no rebasing in 2016 required)

Sch 4ZZB/para 13 applies where an asset disposed of was held at 5 April 2015; the person in question has not made an election under Sch 4ZZB/para 2 (or Sch 4ZZA/para 5, the equivalent ATED-related CGT provision) to compute gains or losses on the basis of the position over the whole period of ownership; and no additional rebasing in 2016 is required under Sch 4ZZB/para 15.

 

The NRCGT gain or loss accruing on the relevant high value disposal is equal to the special fraction of the notional post-April 2015 gain or loss on that disposal.  The “notional post-April 2015 gain or loss” is the gain or loss that would have accrued on the relevant high value disposal had the person acquired the interest on 5 April 2015 for a consideration equal to its market value on that date.  “The special fraction” is -

SD

TD

where SD is the number of section 14D chargeable days (see Sch 4ZZB/para 12(5)) in the post-commencement ownership period; and TD is the total number of days in the post-commencement ownership period.  The post-commencement ownership period is the period from 6 April 2015 to the day before the day on which the relevant high value disposal occurs.

 

The non-resident CGT gain or loss is therefore the proportion of the post 5 April 2015 gain (as determined by the gain or loss from the asset’s market value as at 5 April 2015) that represents the number of days in the post 5 April 2015 period in which the asset was used as a dwelling and was not chargeable to ‘ATED-related’ CGT.