CGT35 Foreign Aspects - Special Rules Flashcards
disposals of UK residential property by non-UK resident individuals have been subject to UK CGT since ….
Therefore….
6 April 2015
Only gains arising after 5 April 2015 are chargeable.
There are three methods for calculating the chargeable gain or allowable loss where the property was acquired before _____.
They are…
6 April 2015
- The default method
The chargeable gain or allowable loss is the difference between the sale proceeds and the value at 5 April 2015.. - The straight-line time-apportionment method
This calculates the gain by deducting original cost from sale proceeds and then time apportioning with only the post-5 April 2015 proportion being charged or allowed. - The retrospective method
This calculates the gain or loss by deducting original cost from sale proceeds.
From ________, non-UK residents are chargeable to UK CGT in respect of the disposal of an interest in any UK land.
For interests in land other than residential property, only gains
arising after _________ are chargeable.
6 April 2019
The default method of calculation requires the land or building to be valued at______ .
Alternatively, the individual can elect for the _______method.
There is no option for _______ in respect of a non-residential disposal
5/4/2019
retrospective
time-apportionment
From _____, disposals by non-UK residents of shares in ‘property rich companies’ (at least __% of gross assets made up of interests in UK land) are subject to UK CGT, where the
individual owns at least ____% of the company at any point in the ____ years prior to the disposal.
From 6 April 2019
disposals by non-UK residents of shares in ‘property rich companies’ (at least 75% of gross assets made up of interests in UK land) are subject to UK CGT, where the individual owns at least 25% of the company at any point in the two years prior to the disposal.
How do the temporary non-residence rules interact with gains charged under non-resident capital gains rules?
The temporary non-residence rules in TCGA 1992, s.1M do not apply to gains charged under the non-resident capital gains (NRCG) rules.
When must non resident capital gains be reported?
When must the CGT be paid?
within 60 days of the date of completion of the disposal.
Any CGT payable on NRCG gains must be paid within 60 days of completion.
How do non-resident capital gains interact with Gift Relief?
Gift relief can be claimed on a qualifying gift of UK land and property to a non-UK resident individual as the UK land will remain within the UK CGT charge under NRCG rules.
Held over gains falling chargeable on the emigration of a donee can be further deferred where the asset is question is an interest in UK land which remains chargeable to UK CGT under the NRCG rules.
How do non-resident capital gains interact with Private Residence Relief?
Private residence relief (PRR) may apply where there is an NRCG disposal in respect of residential property.
If the property has been occupied as the individual’s main residence at some point, the last nine months of ownership will qualify for PRR.
A property situated in a territory in which the individual or their spouse is not resident can qualify for PRR for a tax year provided the individual (or their spouse) occupies the
property for at least 90 days in the tax year.
If the NRCG gain is calculated using the default or time- apportionment method, the period of ownership is deemed to start on 6 April 2015 when determining to what extent the gain qualifies for PRR
Trading through a branch or agency?
If a non-resident person is trading in the UK through a branch or agency, gains on sales of UK assets used in the trade will be subject to CGT.
Rollover relief is available where the replacement asset is situated in the UK.
Special rules may apply to UK resident individuals who own shares in foreign companies where the company would be considered a ‘close company’ if it was a UK company.
Certain gains made by such companies are apportioned between the UK shareholders based on their shareholding in the company but …..
only to those that own over 25% of the company
Apportionment is only made where the gain is
If the company distributes the capital profit within ____ then _____
Capital losses made by the foreign company which meet the conditions in s.3 can be apportioned back to UK shareholders for offset against s.3 gains arising in the same tax year.
TCGA 1992, s.3 can also apply where a UK resident company is a shareholder in the non-resident company. Gains are apportioned to the UK company and will be subject to
corporation tax.
connected to avoidance, is not connected to a foreign trade and would not otherwise be chargeable to corporation tax.
three years of the accounting period in which the gain arose, any tax paid by the shareholder under TCGA 1992, s.3 can be credited against any tax due on the dividend.
