CGT for Non Residents
A question which ended up as a confusing muddle.... if anyone can shed a light or give me pointers I would be so grateful! Situation......
- Client owned a FHL property in the UK and operated it as a partnership with his wife.
- They ceased to trade in Feb 2009 and new owners (of the trade not the building) took over running the FHL business the day after.
- 3 days later my clients emigrated abroad to setup permanent home. They do not intend to come back to UK so are currently considered to be temporary non-resident.
- In June 2010 the FHL property was sold to the new traders.
From what I've understood, non residents are not normally subject to CGT but s10 TCGA1992 states that where a business asset is sold then a non resident is subject to CGT.
Is my client caught by s10 TCGA 1992 as they did not operate the trade whilst non residents. They did not operate the FHL through a UK branch or agency as the new traders were entitled to the FHL profits from the 23rd Feb 2009.
Is the sale subject to CGT at all?
Not a trade
TCGA 1992 s10 only applies to a non-resident carrying on a trade in the UK. As you comment, the clients did not carry on the activity whilst non-resident. However, to put it beyond doubt, FHL is generally not regarded as a trade. It is deemed to be a trade for certain specific tax purposes but s10 is not one of them.