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Property
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Such disposals have to be reported to HMRC within the tight timeframe of 30 days, with, in some cases NRCGT paid within this timeframe. Even if a disposal
does not result in a gain or it is sold at a loss, it must still be reported.
It is worth noting however that there is currently, and looks set to continue, a specific exemption from UK tax for gains made by certain overseas pension schemes.
UK commercial property
This is a significant tax change for Gibraltar owners of UK commercial property, who have been outside the scope of UK tax on any gains until now (Gibraltar owners of UK residential property have been within the
scope of NRCGT since 2015). Most property not already within the
scope of UK tax (i.e. UK commercial land or property) has been rebased from April
so that only gains arising after that date are chargeable. It is therefore advisable to obtain valuations of such land or property in order to know the base cost for any future disposal, although there may be rare occasions where it may be advantageous not to rebase the value of the land or property.
Further change for non-UK resident corporate owners On a related note, from 6 April 2020, non- UK resident companies will be brought within the charge to UK corporation tax on
their UK rental profits (such companies are currently liable to UK income tax on their profits).
Challenges and review for the future This rapid pace of tax change poses considerable challenges for non-UK resident owners of UK land or property. They are often unaware of such developments and fitting into the UK’s Self- Assessment system can involve delays and difficulties. The 30 day filing requirement also means owners have to act quickly on completion in order to avoid costly penalties and professional guidance should be taken to ensure that any tax filings are made in good time.
Furthermore, the UK penalties associated with recovering lost tax where an offshore position exists were dramatically increased from 1 October 2018. This is a direct consequence of the ‘failure to correct’ regime that was introduced and which increases the penalties on undisclosed or understated income and gains arising before 6 April 2017. Couple this with increasing international tax transparency and information exchange, and the pressure on non-UK resident owners of UK land or property to keep up to date intensifies.
Therefore, for any Gibraltar residents owning (directly or indirectly) UK land or property, they should review their UK tax position now in order to plan for the future and to avoid any nasty surprises. Planning ahead is essential and a review undertaken in good time can save considerable cost and anxiety in the long term.
‘This rapid pace of tax change poses considerable challenges for non-UK resident owners of UK land or property
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