Capital Gains Tax is the tax on the profit of a personal item you have sold that has increased in value. The important thing to remember is that you are not being taxed for the amount on the product sold but on the profit only. Many of your personal possessions are classed as “assets” under the current Government rules such as second homes, cars and shares.
The annual Capital Gains Tax exempt is rising from £11,700 to £12,000. That is an extra £300 tax-free annual allowance, formally called the Annual Exempt Amount (AEA), open to individuals in the UK. This means people choosing to part with shares or a second home in the next financial year will be among those better off.
Non-UK residents will be pulled into the capital gains tax CGT regime for the first time on 6 April if they dispose of UK land and property.
Currently, non-UK residents are only taxed on disposals of residential property, but from 6 April 2019, all UK land (including commercial property) will come within the scope of UK taxation.
In addition, non-UK residents will also be subject to UK tax on the disposal of assets that derive at least 75% of its value from UK land, so called ‘property-rich’ companies.
With the new CGT regime, a new compliance system is being introduced, which non-UK residents will have to follow in reporting disposals of UK land and paying the associated tax.
Non-UK residents disposing of UK land (or assets that derive at least 75% of its value from UK land) must file a return within 30 days following the completion of the disposal, and a payment on account must be made at the same time.
The amount of tax to be paid is calculated under the normal rules, including using any allowable losses at the date of disposal.
If you would like any advice regarding the April changes to non-resident CGT or would simply like to discuss other ways in which we could help you or your business, please get in touch.