Skip to main content Skip to footer

Upcoming changes to non-resident capital gains tax

Share this page

facebook logo  X logo  Linked in logo

The Government has passed legislation to extend the non-resident capital gains tax and non-resident corporate tax on gains net to all UK land and property, from 6 April 2019. These taxes are together termed NRCGT. The changes to NRCGT will bring commercial property and all non-resident companies into charge. It also includes indirect disposals.

The current rules

As of 6 April 2015, non-resident individuals, trustees and close companies have only been subject to NRCGT on direct disposals of residential property in the UK.

The gains are calculated by either:

  • Rebasing the property’s cost as at 5 April 2015, to only account for the gains arising from the date the property would have come into charge.
  • Using the original costs of acquisition.
  • Time apportioning the whole gain.

The extension of NRCGT from April 2019 will not affect the current treatment of UK residential property.

The changes

From 6 April 2019, NRCGT will be chargeable on both UK residential and commercial land/property, disposed of directly, or indirectly by all non-resident individuals, trustees and companies

These changes will supersede the Annual Tax on Enveloped Dwellings (ATED) capital gains tax regime that was previously proposed.

These disposals will need to be reported within 30 days of completion.

Direct disposals

UK property coming into charge from 6 April 2019 can be assessed for capital gains tax on the following basis:

  • Rebasing at market value from 5 April 2019.
  • Using the original costs against the gains e.g. if this would generate a loss.

UK property with residential and commercial mixed use may require valuations at both 5 April 2015 and 2019.

Indirect disposals

A far more convoluted concept. This is where a vendor disposes of a shareholding, partnership interest or trust interest in a property-rich entity. An entity will be property-rich if at least 75% of its gross assets derive directly, or indirectly, from UK land.

An indirect disposal will occur if all three conditions are met:

  • The entity is property-rich;
  • The vendor holds directly (or indirectly through connected persons) at least a 25% interest; and
  • The UK land held is not for trading purposes (e.g. not hotels, restaurants etc. where the property is ancillary to the main business).

The vendor can calculate their gains from indirect disposals by:

  • Rebasing the cost of the asset being disposed (e.g. shares) at 5 April 2019.
  • Using the original costs of the holding/interest in the entity. However, losses generated using this method are disregarded.


HMRC have confirmed that UK corporate and individual capital gains tax reliefs will be available for non-residents. The treatment of losses for individuals and companies differ from one other.

Need help?

If you have any questions, or believe you may be affected by the changes, get in touch with Bridie Iachetta or Alex Coghill. Call 0330 024 0888 or email


About the author

Larking Gowen

Share this page

facebook logo  X logo  Linked in logo


Sign up to receive the latest news from Larking Gowen

facebook logoX logoLinked-in logorss logo

Cookie Notice

We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.
Find out more here