Previously non-resident capital gains tax (NRCGT) was only relevant to direct disposals of UK residential property. However, as of 6 April 2019 there has been a significant extension to the scope of NRCGT for non-residents disposing of:

  • Interests in UK immovable property – including commercial buildings and land.
  • Assets that derive at least 75% of their value from UK property/land (i.e. indirect disposals), for example disposals of shares in ‘property-rich’ companies. To be within scope the non-resident must have a substantial indirect interest, broadly considered to be a 25% investment in the property rich entity, directly or indirectly (together with certain connected parties). There are some exemptions.

Non-resident individuals (and trustees) are subject to NRCGT and non-resident companies are now subject to corporation tax (previously they were exposed to NRCGT).

Annual Tax on Enveloped Dwellings (ATED)-related CGT has been repealed.

Where an asset is subject to UK tax for the first time (e.g. not directly held UK residential property), there is an opportunity to rebase the gain to 5 April 2019.

HMRC has published draft guidance on this subject.


There are a number of different rates:

  • In relation to residential property:
    • 18% for basic rate taxpayers; and
    • 28% for higher or additional rate taxpayers.
  • In relation to non-residential property:
    • 10% for basic rate taxpayers; and
    • 20% for higher or additional rate taxpayers.

Non-resident companies will be subject to corporation tax on gains at a rate of 19% (for the 2019/20 tax year), though this is due to fall to 17% in April 2020.

These changes reflect a significant broadening of the UK tax base, the intention seems to be to level the playing field between residents and non-residents.

This legislation also makes a move towards aligning the CGT treatment of residential and commercial property.

In summary, property taxation is rather complex and seemingly ever-changing. The taxation of gains is one of many tax issues which affect non-residents (as well as UK residents) who own UK property/land and/or interests in ‘property rich’ companies.

If you wish to discuss this topic further or have any other questions, please contact Kieron Clement-Smith or any member of the Edwin Coe Tax team.

Edwin Coe LLP is a Limited Liability Partnership, registered in England & Wales (No.OC326366). The Firm is authorised and regulated by the Solicitors Regulation Authority. A list of members of the LLP is available for inspection at our registered office address: 2 Stone Buildings, Lincoln’s Inn, London, WC2A 3TH. “Partner” denotes a member of the LLP or an employee or consultant with the equivalent standing.

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