If you live abroad and dispose of property or assets in the UK, you may still be liable to pay UK Capital Gains Tax (CGT). The process for reporting and paying this tax is different for non-residents, and it’s essential to understand your obligations to remain compliant with HMRC regulations. This article provides a clear, objective overview of how non-residents should report Capital Gains Tax when they sell or dispose of UK assets.
Understanding Capital Gains Tax for Non-Residents
Capital Gains Tax is a tax on the profit you make when selling or disposing of an asset that has increased in value. In the UK, this applies to various types of assets, including property, shares, and certain personal possessions. While UK residents are generally liable to pay CGT on all gains (including those made overseas), non-residents are only subject to CGT on gains from certain UK assets.
Since 6 April 2015, non-residents have been liable to pay CGT on disposals of UK residential property. This was later extended to include all UK property or land (residential and commercial) and certain rights to assets that derive at least 75% of their value from UK land, as of 6 April 2019.
Who Needs to Report?
If you are living outside the UK and dispose of UK property or land, you must report the disposal to HMRC, regardless of whether you owe any tax. This applies to:
- Individuals
- Trustees
- Personal representatives
- Partners in a partnership
Companies and other entities may have different rules under the Corporation Tax regime, so professional advice should be sought if applicable.
You must report the disposal even if:
- You have made a loss.
- The gain is below the annual exempt amount.
- You believe no tax is due.
Failure to report within the specified time limits may result in penalties, even if there is no tax to pay.
Time Limits and Deadlines
Since 6 April 2020, non-residents disposing of UK property must report the disposal and pay any CGT due within 60 days of the completion date. Before that date, the deadline was 30 days.
This 60-day reporting window applies to:
- Residential and non-residential UK property or land.
- Direct and indirect disposals (e.g. selling shares in a company whose value derives from UK land).
The deadlines are strict, and late filing can lead to automatic penalties. Therefore, it’s essential to calculate any gain, prepare the necessary documentation, and complete the submission promptly.
How to Report and Pay
Non-residents must use HMRC’s online service to submit a non-resident Capital Gains Tax Return. You’ll need to set up a Government Gateway account if you don’t already have one. Required information includes:
- Personal details.
- Details of the property sold.
- Calculations of the gain or loss.
- Any reliefs or exemptions claimed.
- Payment method and amount.
After submitting the return, any CGT owed must be paid within the same 60-day window. Payment can be made by bank transfer or other accepted methods outlined by HMRC.
It is possible to amend the return within 12 months of the original submission if further information comes to light or if adjustments are needed.
Claiming Reliefs and Exemptions
Several reliefs and exemptions may reduce your CGT liability, such as:
- Private Residence Relief (PRR) if the property was your main home during ownership.
- Lettings Relief, though it has been significantly restricted in recent years.
- Annual Exempt Amount – for the 2024/25 tax year, this is £3,000 for individuals.
- Capital losses – allowable losses can be offset against gains made in the same tax year or carried forward.
These reliefs are subject to specific conditions and should be carefully reviewed to ensure eligibility.
Conclusion
Even when living abroad, disposing of UK property or land means you are still within the scope of UK Capital Gains Tax. Timely reporting through the non-resident Capital Gains Tax Return and correct payment are essential to avoid penalties. Understanding the rules and seeking professional advice where necessary can help ensure you meet your obligations without unnecessary stress.
