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  • Tax

    CGT for non-residents.

    Some 6 years  ago my son was gifted a 1/6th share of a house as were his cousins. The property is now to be sold. He lives and works in Australia, has never worked nor lived in the UK for the last 14 years and has never registered for tax or anything in the UK.

    On being given the beneficial interest I believe his interest was notified to the Land Registry. On the sale he will receive his share of the proceeds and as there was a valuation at the time of the gift he personally has a capital gain of about 8k. I think he has to notify HMRC of his disposal within 30 days and how does he stand with CGT?

    As a non resident does he have to pay CGT, if so can he use the exemption allowance? As the gift was 6 years ago does the business of inheritance tax liability cease after 7 years or am I behind he times.

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    IHT should  have been dealt with prior to the land registration in the beneficiaries names . CGT would be due for any gain over and above the declared value at th date of the death(form IHT 250)..However in your sons case as a non resident i believe he would only be due for CGT for any gain in the value since April 2015.Prior to that date he would not have been liable for any CGT

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     I understand the IHT situation and doubtless there has been a capital gain the question really is as a non resident does he have to pay UK  CGT and if so is he entitled to the exemption.

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    Hi

    I can speek as a non resident lanlord. HM GOV  expect overseas landlords to fcomplete tax returns if they recive any rent from property. You have to regester as a non resident landlord and complete your returns. If you are late fileing you get fined.

    Untill HM gov accept you as non resident landlord letting agents are to withhold 20% of the rent and give it to the tax man.

    As a non resident landlord when selling you must inform the tax man within 30 days and pay any CGT of between 28% to 18%  due, less allowances. You were allowed to make £11,100 tax free in 2015/16. 

    You also have to take into account you tax laws of were you live as they will be interested in taxing you if they can. In your position there there would be no tax to pay.That said things change so I would talk to an accountant to put your mind at rest

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    Lots of info on gov website https://www.gov.uk/guidance/capital-gains...l-property   and   https://www.gov.uk/guidance/capital-gains...in-or-loss

    and a non res CGT calculator https://www.tax.service.gov.uk/calculate-...-resident/

    If you're still not sure then you need to speak to a good property accountant who's used to dealing with non resident landlords, not all of them are (even the so called experts). Be prepared to pay a few hundred quid for some decent advice. Everything you need to work it out is on the gov website so you can do it yourself, it just takes time to go through it all.

    From what you've said your son is definitely non-resident, so you need to try and work out the gain from the market value at 05/04/15 to the date sold, then deduct any allowances, then see if there's anything left to pay.


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    Thank for that

    There is no income accruing to my son it is just his beneficial interest that is of concern. On disposal he will be under the CGT exemption threshold if that applies. He may take Australian citizenship later this year so has therefore no connection with the UK..Are non UK citizens also being non-resident have any liability for UK CGT and if so do the personal exemptions apply. I understand he will have to declare the disposal within 30 days which is no problem.

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    As a non-resident the CGT exemption applies, not sure if there's different rules for non uk citizens though. I'd imagine it's the same for both but maybe ask the taxman or an expert to clarify.

    The other option is to complete the NRCGT form once the property is sold and declare nothing is owed, and let them do the legwork and chase you if they disagree.

    Here's the form to complete when ready: https://www.tax.service.gov.uk/shortforms...CGT_Return

    By the way you need to complete the NRCGT form within 30 days of the exchange date, not the completion date. I was caught out by this when selling one of mine last year, and was fined for sending it in late.

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    I am non resident and have recently sold properties bought before April 2015. Your son will get his CGT allowance of £11K, if the gain is more, he should consider getting a retrospective valuation(April 2015) from RICS surveyor which can cost as little as £300. He will owe CGT on the difference between the retro valuation and the sale price minus his allowance and professional fees.

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