Real Estate Investor Magazine South Africa March 2015 | Page 60

FINANCE

Capital

Gains Tax

Payment of Capital Gains Tax
now compulsory in UK
BY MIKE SMUTS

A

s first announced in the 2013 Autumn
Statement, Capital Gains Tax (CGT) is
to apply to non-residents disposing of UK
residential property, on gains arising on disposals after
5 April 2015.
Before then CGT was not applied to non-residents
(other than those carrying on a trade in the UK) and,
since April 2013, on companies subject to the Annual
Tax on Enveloped Dwellings (ATED) charge.
The extension of the CGT charge is intended to
harmonise the UK system with other jurisdictions
that charge CGT on the basis of where the property is
located rather than where the owner is a resident.
Most of the details of the charge have emerged
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March 2015 SA Real Estate Investor

in a consultation response published in November
and draft clauses published on 10 December 2014,
although these are still described as subject to further
consultation and may change.
CGT will be charged on non-residents disposing
of UK residential property. Non-residents include
individuals,
partnerships,
trustees,
personal
representatives of a non-resident deceased person
and non-resident companies. Companies which are
diversely held and do not fall within a new test as a
‘narrowly controlled company’ will be outside the
charge.
A disposal of any interest in UK residential property
will be within charge to CGT. This will include any
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