Until April 2015, a client could avoid UK capital gains tax (CGT) on the sale of their UK properties by becoming non-resident in the UK and staying non-resident for five full tax years. However, from 6 April 2015, a non-resident capital gains tax (NRCGT) charge has been introduced for non-residents that sell UK residential property.
On 7 August 2017, HMRC updated the penalties section of the guidance to explain when interest could be charged. As a reminder, a client has 30 days from the day the property sale is completed to notify HMRC, e.g. by 31 August if the sale completes on 1 August. They will get a £100 late filing penalty and be charged interest if it’s not submitted by the deadline. There is a further penalty of the greater of £300 or 5% of the tax due if it’s more than six months late and another one if it’s over twelve months late. If the client doesn’t need to complete a UK tax return, then they will also need to pay any NRCGT within the 30-day deadline or suffer late payment penalties and interest.