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Extending CGT to non-residents investing in non-residential UK property.
As from 6 April 2015, non-residents are liable to UK capital gains tax (CGT) on the sale of residential dwellings situated in the UK. This change was implemented in order to bring the UK in line with many other countries, with an established pattern of taxing property situated in their jurisdiction. A PPR election is available where the non-resident individual spends at least 90 days per tax year at the residence.
From 6 April 2019, non-residential (commercial) UK property will also be brought into this regime.
HMRC to speed up capital gains tax payments for residential property sales.
A payment on account of capital gains tax will need to be made when a residential property is sold from April 2020.
Payment will be due within 30 days of completion and the seller will have to submit a “payment on account” return at the same time.
The changes affect those selling a second home or rental property. They will not apply to disposals covered by principal private residence relief.
Is it time to make or review your Will?
Making a Will is the only way to ensure that your wishes are carried out after your death. If you have not made a valid Will, your property will pass according to the Law of Intestacy, which may not be what you would have wished, following many years of building a property portfolio. If you do have a valid Will, it is advisable to have it reviewed every 2-5 years to take into account changes in your circumstances.
Property Investment versus Trading
The distinction between development and investing in property is crucial for tax purposes. Often it will be quite clear-cut as to whether a person is trading or investing in land. A person buying property to let out long term will be making a property investment, whereas someone buying a property to refurbish and sell will most likely be trading as a property developer. There can, however, be situations where there is a fine line between how the activity is treated.
Have you read our latest guides? More guides are available on our website.
If you have and questions or would like more information, please get in contact on: 01895 236335 or email propertyservices@wardwilliams.co.uk
