01 / 05 / 2019

6 April 2019 brought in the start of the new tax year and with it yet another change to the taxation of UK property – namely, a widening of the scope of the Non-Resident Capital Gains tax regime as previously reported.

Simplification is often quoted as one of the motivating factors for the raft of recent changes that have been introduced over the last few years. Yet, often it is hard to see how the new rules are any simpler than the previous rules. It fact, they often seem to add an extra layer of complexity. However, this time a degree of comparative simplicity does appear to have been achieved and with it a potential tax saving.


  • On 1 April 2013 an Annual Tax on Enveloped Dwellings (ATED) was introduced. Broadly, an annual charge paid by non-natural persons (e.g. companies) owning high value UK residential property. Initially introduced for properties valued at £2m or more, the threshold has been reduced over time to £500,000.
  • Also introduced was ATED-related Capital Gains Tax (ATED CGT); a tax on the gain realised on the disposal of residential property which was within the ATED regime. For the purposes of calculating the gain the base cost of the property was treated as the value of the property on 5 April 2013.
  • ATED and ATED CGT were followed on 6 April 2015 by the introduction of Non-Resident Capital Gains Tax (NRCGT). Upon its introduction NRCGT was much wider than ATED CGT in its scope and applied to any non-resident individual, trust, company etc. which disposed of UK residential property. For the purposes of calculating the gain the base cost of the property was treated as the value of the property on 5 April 2015, i.e. the day before the new tax was introduced.
  • So, for the last few years it has often been the case that on the disposal of UK residential property by a company both ATED CGT and NRCGT have been potentially payable. Provisions ensure that there is no double taxation but it has still been necessary to obtain valuations for all of the relevant dates, to compute the gain over both periods and to submit two CGT Returns.
  • However, NRCGT has now been widened even further to include commercial property, and land, and to catch indirect disposals of property rich entities. Property and land being brought into the charge for the first time can use a base cost of the value of the property or land on 5 April 2019 when computing their gain.
  • The widening of the NRCGT regime has been accompanied with the abolition of ATED CGT.


For companies disposing of UK residential property from 6 April 2019 this means simpler CGT reporting but also a potential tax saving. ATED CGT applies to any gain since April 2013 but NRCGT only applies to gains since April 2015, so any gain that arose during the April 2013 to April 2015 period will no longer be subject to CGT. A further saving arises from the varying tax rates. ATED CGT was payable at a rate of 28% where as NRCGT for companies is subject to Corporation Tax rates which are currently just 19%.

Some welcome good news and perhaps a reason to revisit those structures which have not been de-enveloped before now. If you wish to discuss a particular property holding structure then please do not hesitate to get in touch with us.