GM Tax

Living in Australia
Disposal of UK Property for UK Non-residents

When you sell your UK residential property you must file a Capital Gains Tax Return within 30 days with HMRC and pay any capital gains tax arising at the time of filing the tax return.

Before the 6th of April 2020 only non-UK residents were required to file a capital gains tax return which was more commonly referred to a Non-Resident CGT return (NRCGT).

Non-UK residents who sell a UK property are required to report the disposal of HMRC within 30 days and pay any capital gains tax arising.

Should you not file your capital gains tax return within 30 days of the completion date automatic late filing penalties apply:
  • £100 will apply initially.
  • Followed by fixed £300 penalties at 6 months and 9 months.
Late payments will attract interest.
UK Properties sold after 6 April 2015 the capital gain is generally calculated as follows by:
  • Rebasing as at 5th April 2015
  • Original cost on a time apportionment basis
  • Or, by calculating the gain over the whole period
You can choose whichever method is most beneficial for you.
  • If the property was your former home, the property would be eligible for Private residence relief.
  • The final period relief will also be available i.e. the last 9 months of ownership will be eligible for relief and classed as being your home regardless of whether you lived in it during that time.

You may have only one main residence (PPR) for tax purposes at any time.  Where you have more than one residence, there is a choice to nominate any one to be treated as your main residence, but the last 9 months may be claimed on multiple properties provided you have lived in the property at some point.

Please note, should you sell the property as a non-resident of the UK but return to the UK within five years of UK non-residence you will be considered temporarily non-resident in the UK and the portion of gain not charged to non-resident capital gains tax will be subject to UK capital gains tax for the tax year in which you return to the UK.

  • You are eligible for the annual CGT exemption of £12,300 in 2021/2022 meaning that the gain over and above this amount would be liable to tax at 18% (or 28% if you have other UK income making you a higher rate tax payer).

If you are a permanent resident or an Australian citizen the property disposal will also be subject to capital gains tax in Australia although exemptions may be claimed to minimise the tax due. The cost of the property may also be subject to rebasing.

There is also a forex gain or loss to declare on the redemption of a mortgage.

If you and your spouse are both temporary residents and meet the foreign income exemption requirements you may not be subject to tax in Australia on the property disposal.

We at GM Tax can assist with the completion of UK CGT and annual UK tax returns. We provide fixed fee quotes for all tax returns.

If you are moving to Australia or already living in Australia or have recently arrived in the UK – and would like a fixed fee proposal from a firm of UK & Australian tax advisors that understands the issues affecting new arrivals to Australia and individuals leaving and arriving the UK please complete our online enquiry via our home page or by calling a GM Tax office close to you.

Once again tax residency is fundamental to determine who has taxing rights over the Australian business profits.

For Sole Traders and Directors a person’s individual residency can affect the residency of the business.

If you are looking to do business in Australia I would recommend that you obtain professional advice to go through your options.

We at GM Tax provide fixed fee quotes for advisory work and tax returns

If you are looking to do business in Australia or have recently done business with Australia – and would like a fixed fee proposal from a firm of Australian tax advisors that understands the issues affecting expats living and doing business overseas please complete our online enquiry via our home page or by calling a GM Tax office closest to you.

GM Tax also offers the following services:

  • Tax planning advice and guidance with regards to your residency status in the UK, eligibility for split year treatment and also domicile status in the context of Inheritance Tax (IHT) planning.
  • Preparation of UK and Australian tax returns, with all returns submitted to HM Revenue or the ATO electronically where possible.
  • Advice on the tax position where a property in the UK is being let while a taxpayer is living overseas.
  • Assistance to ensure UK source income of those who are non-residents of the UK is properly taxed and is not taxed twice, or double taxed.
  • This last point is particularly relevant to those who have UK source income or capital gains which may also be subject to tax in the country in which the taxpayer is now resident.