Ask Money: what are the CGT rules for UK non-residents?
Laura Sant of Carthy Accountants helps a reader with a question about tax.
9th March 2020 12:10
Laura Sant of Carthy Accountants helps a reader with a question about tax.
For tax purposes, I am resident in Australia, where I have been living since 1974. I have some M&G investment funds that I have held in one form or another since 1983. If I were to sell these shares, would I be subject to CGT and/or withholding tax, and how much would I have to pay? Would M&G act on behalf of HMRC and retain the tax payable, or would it deposit the gross proceeds from this sale in my UK bank account?Joseph Zekan, by email
Dr Laura Sant, director and international tax specialist at Carthy Accountants (part of the Experts for Expats network, expertsforexpats.com), replies:
Capital gains tax is not charged on the sale of shares for UK tax non-residents, as long as they remain non-resident for a period of at least five years. As things stand, the only exception to this would be if you were making an indirect disposal of UK property or land by selling the shares (which is unlikely to be the case with an investment portfolio). This is because you need to have a holding of at least 25% in the company that holds the UK land and property as an investment.
Therefore, if you dispose of your investment portfolio, this will be outside the scope of UK taxation and will not need to be declared to HMRC. M&G will pay you the gross proceeds from the sale of the shares. From a UK tax perspective, it’s an ideal situation. However, it is worth speaking with an Australian tax adviser about your Australian tax obligations before you dispose of the shares, because the Australian tax authorities would have a right to tax these gains.
If you need help with a tax, pension or financial planning problem, please email: moneyobserver.ed@moneyobserver.com
- Ask Money: is a lack of diversity in investing always a danger?
- Ask Money: how about cautious investment ideas?
- Read more Ask Money content here
This article was originally published in our sister magazine Money Observer, which ceased publication in August 2020.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.