A potential client that is looking to invest in property in the UK. Part commercial, part residential.
The gentleman does not live here in the UK, is not resident, nor is he ordinarily resident. Visits occasionally roughly once in 2-3 years for a few weeks. He intends on letting the property, and will submit a UK Property tax return accordingly each year to declare his income.
The question is, all circumstances remaining the same i.e. he stays abroad when he sells the property, will he be liable to Capital Gains Tax?
I have looked through the AccountingWeb website but not really come across a conclusive answer. Spoken to HMRC, who have said that if he is not resident in the UK then he would NOT be liable to CGT. If he were from an EU country, which he is not, he would be required to declare it on a tax return here in the UK. The lady I spoke to in HMRC's 'technical team' from the Capital Gains Tax department was not able to give me anything in writing regarding it. She did however direct me to the HMRC website, which I had already tried, and has now confused me even further.
From what I gather, there would be no CGT due. BUT, then CG10920 goes on to say that 'if the individual carries on a TRADE (property rental?) in the UK through a branch or agency that person is within the charge as regards gain..." Clearly the fact that the person is renting the property will be considered a trade. But what do we make out of of the 'branch or agency'? I made the lady at HMRC aware of the fact that after purchase the property would be let, and yet she still seemed to maintain that there would be no CGT liability.
Basically what I'm asking is if there will be CGT due for the client and where I can read up further on it?
Any help/suggestions/guidance will be MUCH appreciated.
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