By July 19, 2019 Insights


  • All non-UK resident persons’ gains on direct disposals of UK land will be chargeable.
  • Indirect disposals of UK land will be chargeable.


  • Applies to non-residential property.
  • The value of the property can be rebased on 1 April 2019 for companies and 6 April 2019 for other persons, which means that only the gain accruing after this date is effectively taxed. Otherwise, original cost will need to be used.
  • The rate of tax will be the same as for UK residents (i.e. the normal CGT rates apply to individuals and the corporation tax rate to companies).
  • CGT losses on these disposals will be available to set against other immovable property gains (residential and non-residential).
  • Corporation tax losses on these disposals will be available to set against any other company gains.
  • Rollover relief will be available for business assets, subject to the normal rules and requirements for relief.


  • Applies to residential and non-residential property.
  • Applies when a non-UK resident investor disposes of an interest in ‘property rich’ entities (such as companies, partnerships and property unit trusts) and at the date of disposal, or at any point in the two years prior to that date, the non-UK resident holds, or has held, a 25% or greater interest in the entity. (The Government originally proposed a five-year look back for this test, but reduced this to two years based on consultation feedback).

A ‘property rich’ entity is one that derives 75% or more of its gross asset value from UK property.

  • Any interests held by parties connected to the non-resident at the date of disposal, or within the prior two years, will be taken into account when calculating whether the 25% test is met.
  • The value of the property can be rebased to April 2019. The Government originally said that rebasing would be the only calculation method for indirect disposals. However, following consultation feedback it has agreed that the retrospective basis (i.e. using the original acquisition cost of the asset) will also be allowed on indirect disposals.

This recognises that in some circumstances on indirect disposals it will not be practical to obtain a valuation at April 2019. However, to prevent this creating significant losses arising from assets that were not in the UK tax base prior to commencement, where the retrospective basis is used on indirect disposals, it will only be capable of producing a chargeable gain. Any loss would not be an allowable loss.


Given that there are situations where the UK does not have taxing rights over an indirect disposal due to the taxing rights under a particular tax treaty, the Government introduced an anti-forestalling rule to apply to certain arrangements that seek to exploit provisions in certain tax treaties.

The rule applies to arrangements, entered into on or after 22 November 2017, where:

  • The main purpose, or one of the main purposes, is to obtain a UK tax advantage for any person.
  • The tax advantage is in relation to tax to which that person would (apart from the arrangements) have become liable as a result of the charge to tax on gains accruing to non-residents that will come into force on 1 April 2019 (for companies) and 6 April 2019 (for other persons). April 2019 will therefore be a rebasing point for widely-held (a widely-held company is one that is not close) non-resident companies on all disposals of UK property and for all persons on all indirect disposals.
  • Where that advantage arises by reason of any provisions of double taxation arrangements, but only in a case where the tax advantage is contrary to the object and purpose of those provisions.

The new TAAR will apply to arrangements entered into on or after 22 November 2017 in a treaty shopping case (i.e. where advantage is taken of favourable treaties available in certain jurisdictions), and arrangements entered into on or after 6 July 2018 in any other case.

It applies if a person has entered into any arrangements the main purpose, or one of the main purposes, of which is to obtain a tax advantage for the person as a result (wholly or partly) of a provision of these new rules applying or not applying, or double taxation arrangements having effect despite a provision of these new rules in a case where the advantage is contrary to the object and purpose of the double taxation arrangements.

The tax advantage will be counteracted by the making of such adjustments as are just and reasonable, by way of an assessment, the modification of an assessment, amendment or disallowance of a claim, etc.


Where the Annual Tax on Enveloped Dwellings (ATED) applies to a property, CGT is payable when the property is sold. ATED-related CGT is payable mainly by companies that own UK residential property valued at more than £500,000.

A significant number of respondents argued that the ATED-related CGT rules were too complex and seemed unnecessary once this new measure comes into force. In particular, the rebasing provisions, and the interaction between ATED-related CGT, Non-Resident CGT, and the new rules, was cited as creating a very difficult system for taxpayers to understand and operate within. The Government therefore intends to abolish the ATED-related CGT provisions.


The Government’s November 2017 consultation prompted detailed input from the majority of respondents on the impact on funds with UK real estate investments, recognising the extreme complexity of this area. The two issues identified as being of most importance were:

The impact on exempt investors in offshore funds, where the rules as proposed could cause them to be taxed at the level of subsidiary holdings, and its potential for economic double taxation, due amongst other things to the indirect disposal rules, when disposals were made at a lower tier of a fund structure and the proceeds passed up to investors.

The Government has said that it intends to build on the detailed consultation responses and is exploring, with relevant stakeholder groups, how best to produce a set of special rules that address the taxation of exempt investors, and multiple taxation within fund structures.