Non-resident Capital Gains Tax (NRCGT)

From April 2015 a new Capital Gains Tax (CGT) charge was introduced which taxes relevant gains on UK residential property by non-residents, subject to limited exemptions. From April 2019 the charge will extend to commercial property and will extend the existing charge on residential property to a wider class of investors.

The current NRCGT regime

Residential property gains made by companies that are not within the charge to ATED related gains are taxed at 20%, on any growth in value from April 2015.

The charge on relevant gains for non-residents that are not companies (individuals, trusts, partnerships) will be at the normal CGT rates of 18% or 28%, depending on their status as basic rate or higher rate taxpayers.

Non-residents can calculate gains in three ways:

  • the default method of calculating gains is that the April 2015 value will be used as the base cost; or
  • elect for straight line time apportionment of the gain over the whole period the property was owned; or
  • elect to use the actual cost of the property as the base cost

Extension of the NRCGT charge from April 2019

The Government announced in the November 2017 Budget that non-resident investors in UK commercial property will, from April 2019, pay UK capital gains tax or corporation tax on gains. It was also announced that the existing NRCGT charge on UK residential property will be extended from April 2019 to include companies that have diverse ownership.

Disposals of “envelopes”

Another new measure that will apply from April 2019 to both commercial and residential property will ensure that gains on disposals of interests in entities that are “property rich” will be chargeable to UK tax. For these purposes, an entity that is “property rich” is defined as deriving 75% or more of its value from UK land. This means, for example, that a sale of shares will still trigger a charge to non-resident capital gains tax.


Rebasing for the new charges will either be on the April 2019 value or the original acquisition cost of the property. Unlike the existing NRCGT regime for residential property, there will not be an option to time apportion the gain in a straight line over the full ownership period.