FAQs
My asset is in the UK and I am resident overseas – am I affected by capital gains tax?
You have to pay capital gains tax on gains you make on the disposal of residential and non-residential property in the UK. From 6 April 2019, capital gains tax may also apply on gains made on ‘indirect disposals’ of UK land which (broadly) involves disposals of interests in companies (such as shares) by non UK residents with a substantial (25% or more) interest in a company which derives at least 75% of its gross asset value from UK land.
You generally will not pay capital gains tax on other UK assets e.g. shares in UK companies, unless you return to the UK within 5 years of leaving.
Does a capital gains tax liability arise when someone dies?
When you inherit an asset, inheritance tax is usually paid by the estate of the person who has died. If the asset is disposed of by the executors during the period of administration, then any tax due will be dealt with by the executors as part of the estate’s tax affairs.
If you inherit the asset, you will only be liable to capital gains tax personally if you dispose of the asset in the future.
What is the difference between capital gains tax and income tax?
When you acquire an asset to use or hold for a period of time, the profit you make on the disposal of the asset will be treated as a capital gain and subject to capital gains tax.
When you acquire an asset with the intention of selling it for a profit, the transaction is treated as trading and you should pay income tax on the profit you make on sale.
Does capital gain tax affect overseas assets?
If you are resident in the UK and your asset is overseas you may still have to pay capital gains tax. We can advise on the rules and also the specific rules governing this area for non-domiciled UK residents and the use of the remittance basis of taxation, which may exclude the capital gain from UK taxation.
You generally will not pay capital gains tax on other UK assets e.g. shares in UK companies, unless you return to the UK within 5 years of leaving.