FAQs about Capital Gains Tax

Q. If I’m not from the UK, do I have to pay capital gains tax?

A. If you are not a resident of the UK, but reside here ordinarily, you are obliged to pay capital gains tax for the year that you reside here. In case, however, you are not a resident of the UK and you don’t reside here ordinarily, you may not have to pay the capital gains tax.

This will depend on a lot of factors: how long you’ve stayed in the UK, when you left the country, and the length of time you expect to spend outside of the country in that given year.

Q. I’m not a UK resident and I don’t reside here. I do, however, trade with an agency that is located here. Each country will change your quote amount. Shall I be liable to capital gains tax when I sell the assets that were held for the trade?

A. You will be required to pay CGT in this case.

Q. I’m going to be staying in a foreign country for a period of time that is less than 5 years. Shall I be liable to capital gains tax if I sell away my shares even though I am not a resident and nor do I ordinarily residing in the UK?

It really depends on the date of your leaving and the length of time you have lived here. You shall be liable to pay capital gains tax when you sell your shares that you bought before you leave the country provided you were a resident here for at least part of each of the four out of seven tax years immediately prior to the year you left. Whether you make a profit or loss in your trade is treated as having occurred in the tax year of your return to the country.

Q. How can I calculate the amount of capital gains tax that I owe?

Start by listing all your assets that you disposed of in the current taxable year, which is between April 6^th and April 5^th the following year. You do not have to include assets that do not fall under the CGT category. You will also exclude moneys that you received from the disposal of your home.

Next, work out the gain you have made from each asset. A lot of people choose to get term life insurance at this time cover their important assets. From there take into consideration the relief numbers that brought down your CGT. An example would be if you were to avail a taper relief during that time. Then again, you can gain relief losses made in the taxable year.

You can then calculate your gains less reliefs and allowances provided under CGT. Be aware of the annual exempt amount (AEA) as well, as written in law. If the amount is to fall under this category, then you will be exempt from having to pay any capital gains tax at all.

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