New rules for non UK Residents regarding CGT property disposals

capital gains tax, UK commercial property, UK residential property, HMRC

HM Revenue & Customs have extended the rules that previously applied to non UK residents in respect of UK residential property to UK commercial property also.

This change to the rules means that from April 2019 all UK property disposals made by non-resident individual, whether directly or potentially indirectly through a company or trust, require a non-resident Capital gains tax return which must be completed and submitted to HMRC within 30 days of the completion date. This deadline must be adhered to even if:-

  • You have no tax to pay
  • You’ve made a loss
  • You are registered for Self Assessment
  • You are registered with HMRC for corporation tax
  • You send HMRC Annual Tax on Enveloped Dwelling (ATED) or ATED related capital gains tax returns

Any tax due must be paid within 30 days of completion. You will be issued a late penalty and be charged interest if you miss the deadline:-

  • Up to 6 months late – penalty of £100
  • More than 6 months late – further penalty of £300 or 5% of any tax due, whichever is the greatest
  • More than 12 months, a further penalty of £300 or 5% of any tax due, whichever is the greatest

When calculating the capital gain/ (loss) on a property disposal every individual is entitled to the capital gains tax annual exemption of £12,000 for the tax year ended 5 April 2020.

If you require any assistance regarding capital gains tax for non-residents property disposals please contact us.

Capital Gains Entrepreneurs’ Relief Changes

The Chancellor announced in his 2018 Budget that the minimum qualifying period for CGT entrepreneurs’ relief will be increased from 12 months to 24 months for disposals on or after 6 April 2019.

There are further changes affecting shareholdings in personal companies. In addition to the individual holding 5% or more of the ordinary share capital and voting control they will also now be required to be entitled to 5% or more of the company’s distributable profits and assets in a winding up.   As now the individual must also be an officer or employee of the company concerned; and the company must be a trading company or the holding company of a trading group.

4 ways to improve your farming business: 2. Understand tax and capital gains

Getting a better understanding of your tax liabilities is a fundamental tool in improving the financial success of your farm or agricultural business.

As we highlighted in our previous blog, it’s vital that you have a clear focus on maintaining positive cash flow and have profitability built into your farm’s business model.  And one of the key ways to reduce your costs and increase profits is to be on top of your tax and applying a consistent tax strategy for the business.

So, what impact does tax have? And how do you plan ahead to minimise the effect of tax costs on your farm’s profits?

Read more →