Non-residents disposing of UK property – do you know what to report and when?

When do the rules apply?

From 6 April 2019, non-UK resident individuals and trustees have been required to report disposals of UK property or land within 30 days of completion of the disposal. This includes disposals of residential properties, non-residential properties and indirect disposals (i.e. certain disposals of shares in property rich companies).

When do you have to pay?

From 6 April 2020, any non-resident capital gains tax due must be paid within the 30-day reporting period. The option to defer payment to 31 January following the tax year in which the disposal occurs for persons already within self-assessment no longer applies. Failure to report and pay within the 30-day reporting period will result in late filing penalties and interest.

Temporary relaxation due to COVID-19?

Representations have been made to HMRC to relax the 30-day pay and file regime due to the current the COVID-19 crisis and to account for a general lack of awareness of the new regime. HMRC confirmed on 9 April a relaxation of the new regime but only in certain circumstances. HMRC will not be charging late filing penalties for reports of capital gains tax due on disposals of UK residential property by UK residents made by 31 July 2020. The relation of the new rules appears to apply only to disposals by UK residents. Consequently, any non-resident individuals or trustees must ensure they are aware of the new regime in order to satisfy their UK tax compliance requirements.

Kevin Loundes
Director – Isle of Man

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