Changes to UK property tax for non-UK resident investors

Changes to UK property tax for non-UK resident investors

Prior to April 2019 non-UK residents were taxable on disposals of UK residential property only. Only those persons not liable to UK tax on capital gains, for reasons other than being non-UK resident, would be outside of the charge.

What is changing?

As a result of changes to UK tax legislation, non-UK resident investors will be subject to capital gains tax on gains made on all direct, and certain indirect, disposals of UK property.

Our approach

At Ashburton Investments we continually assess our clients’ portfolios to ensure we are best harnessing the opportunities that present themselves, whether positive or negative, whilst remaining fully invested in our primary responsibility: to protect our shareholders’ capital.  We have therefore made the decision, in respect of the recent change to UK tax legislation, that it is no longer optimal for our clients to hold UK Real Estate Investments Trusts (UK REITS) or certain other non-UK domiciled investment vehicles which invest primarily in UK property. On 1 October our portfolio team will begin the process of selling any holdings of UK REITS within clients’ portfolios and disbursing cash to more optimal investments, whilst maintaining the portfolios’ exposure to the property sector to ensure investment diversification and risk mitigation.

Which Ashburton Investments clients are affected?

Non-UK resident clients of Ashburton Investments whose portfolio currently holds a UK REIT or similarly affected investment vehicle, which are now subject to UK capital gains upon disposal, will be affected. HMRC will require these investors to report any gains or losses, alongside any other classified investments, within 30 days of the sale of the investment.

What do clients need to do?

At this time clients need take no action. An Ashburton Investments portfolio team representative will contact each affected client with a calculation of the realised gain or loss from the sale of the investment and further information on where the reporting documentation can be obtained.

Clients will then be required to report to HMRC within 30 days of the sale of the investment. Ashburton Investments cannot provide advice and where required, investors should consult with a qualified tax advisor with regards to their personal tax situation.