Professional Guidance for Non-Resident Capital Gains Tax Return in UK

Non-Resident Capital Gains Tax (NRCGT) is a tax imposed on the gains from the disposal of UK land or property by individuals who are not UK residents. It must be paid by the non-resident seller of the UK property or land.

There are three methods for calculating the capital gain subject to NRCGT:

• Default Rebasing Method: Under this default method, the non-resident taxpayer obtains a property valuation as of 5 April 2015. Only the difference between the proceeds of disposal and the 5 April 2015 value is taxable.
• The time apportionment method: The time apportionment method takes the total year of ownership and the years since 5 April 2015 into account when calculating the NRCGT. Therefore, you only pay CGT on the portion of the gains made after 5 April 2015.
• Retrospective Computation Method: This method is quite simple and ignores any rebasing or time appointment for 5 April 2015. The entire gain is brought into the NRCGT. The revaluation of the property as on 2015 is not a requirement under this method.

Yes, as a non-UK resident, you are required to report the sale of UK property to HMRC, regardless of whether the sale results in a gain, a loss, or a tax liability. The sale must be reported within 60 days of the completion date.

Failure to report the disposal of UK property on time may result in HMRC penalties, as follows:

• 1-day delay: £100 initial penalty
• 3-month delay: £10 daily penalty (up to £900)
• 6-month delay: Greater of £300 or 5% of the estimated tax liability
• 12-month delay: Additional penalty of £300 or 5% of the estimated tax liability

Various reliefs may reduce your NRCGT bill, including:

• Private Residence Relief (PRR): This relief applies to the disposal of UK Properties that are or have been your main residence at some point during the ownership period. Full exemption applies if the property was your main residence throughout the entire ownership period. The relief is proportional to the time the property was used as your main residence.
• Letting Relief: Letting Relief applies if you rented out part of a property that was also your main residence. After 2020, this relief is limited to properties where the owner lived while renting out a portion. The relief is capped at the lowest of:
  
  • The gain eligible for PRR
  • £40,000
  • The portion of the gain attributable to the let-out part
• Capital Gains Annual Exempt Amount: Both UK and non-UK residents are entitled to an annual CGT allowance. For the 2024/25 tax year, this allowance is £3,000. Gains exceeding this threshold are taxable. Note that the allowance applies per year, not per property.