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Non-Resident CGT – Mission Creep

The Non-Resident Capital Gains Tax Regime (NRCGT) was introduced by HMRC to ensure that taxable gains on UK residential property received by non-resident individuals or companies was suitably taxed. This formed part of a wider government strategy to tackle avoidance (or evasion) of tax by non-residents.

From April 2019, this strategy will go further by extending the NRCGT regime to all UK property. Specifically this includes commercial property and land.

There are a number of important details, including that reliefs normally expected in commercial transactions – such as group treatment and Substantial Shareholding Exemption – will be available.

The biggest area of concern for non-residents affected will be the compliance burden. As with residential NRCGT, a 30 day filing window is expected.

Of course, those who are also required to declare these gains in their home country will need to give due consideration to double taxation, and the Double Taxation Agreement in force between the UK and their home country if relevant.

If you are approaching a commercial property transaction then you should bear April 2019 in mind, and ensure you are complaint after this date.

 

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