From the 6th of April 2015 all non-residents who have sold or disposed of UK property or land, are required to report and pay the capital gains tax liability within 60 days of completion even if:
- You had no tax to pay
- You made a loss
- You are registered for Self Assessment in the UK
How to calculate the gain or loss:
HMRC allows you 3 ways to calculate your gain or loss by either using the:
- The Market value at 5 April 2015
- Establish the value of the property as of 5 April 2015 (known as ‘rebasing’)
- Work out the difference between the value on 5 April 2015 and the value when you disposed of the property.
- Deduct any costs of improving the property incurred from 5 April 2015 and the legal cost of selling the property or;
- Time Apportionment
By working out the gain over the whole period (the date the property was acquired to the date it was disposed of) and then working out what the gain since 5 April 2015 is as a proportion or;
- By working out the gain over the whole period
This computation method may only be worth considering if you’ve made a loss
From our experience obtaining a valuation and using the rebasing method results in a material tax saving, If you don’t have a valuation as at 5 April 2015 you can obtain one from a source such as this:
https://www.hometrack.com/products/opportunity-insight/property-valuation-reports-for-capital-gains-tax/
Reporting the Disposal:
An online Capital Gains Tax on UK property account needs to be used to report your disposal. In order to do this you will need to have a Government Gateway User ID and password. If you don’t have an User ID, HMRC allows you to create one the first time you register.
After you’ve reported your disposal:
Even though you have reported and paid the capital gains tax to HMRC within the 60 day period, you still need to reflect the disposal on the capital gains tax pages of your self assessment tax return after the end of the year as usual. You will be able to indicate on your tax return that you have reported and paid the tax due already.
Annual Exempt Amount
You only pay Capital Gains Tax on your overall gains above your Annual Exempt Amount, which is currently £6,000 for the 2023-24 tax year. From 6 April 2024 the annual exempt amount decreases to £3,000 for the 2024-25 tax year.