Background to CGT rebasing
Capital Gains Tax applies to the increase in value of an assets when compared to the price you paid, when you make a disposal. For these purposes, “disposal” includes gifts as well as sales. Non-dom taxpayers have historically not had to worry much about UK CGT on their overseas assets. However, the Government is abolishing the remittance basis (read more here). Consequently, almost all UK residents will be within the scope of CGT. To lessen the impact of this change, new CGT rebasing rules will be introduced from 6 April 2025.
Rebasing an asset means you can use the value of the asset at a particular date when calculating the CGT. This can result in a tax saving if the asset has increased significantly between your acquisition date and the rebasing date.
5 April 2017 rebasing
Under the new rules, former remittance basis users can rebase their assets to their 5 April 2017 value. You will need to meet certain conditions to qualify:
- You were not UK domiciled or deemed domiciled before 6 April 2025
- Rebasing is only available if you have made a remittance basis claim since the 2017 / 2018 tax year
- You must have owned the asset on 5 April 2017
- The asset must have been outside of the UK from 6 March 2024 to 5 April 2025
Whether or not a rebasing claim makes sense for you will depend on a number of factors. For example, you will want to consider whether any double tax treaties may apply to the disposal. If so, the credit for any foreign taxes paid may make a rebasing claim unnecessary. You should also consider any CGT reliefs that might be available on the disposal, such as holdover or rollover relief.
Other rebasing regimes
There are various rebasing schemes under UK tax law that cover:
- UK residential property owned by non-residents
- Assets owned by people who became deemed-domiciled on 5 April 2017
- Gains accruing to non-resident trusts
The Government has confirmed that the new rules will not interfere with these existing rebasing schemes. However, it is possible that you could qualify for more than one scheme. As always, we would strongly recommend taking professional advice on your options before making any disposals.
