CG73746 | Non-Resident Capital Gains Tax (NRCGT) - Disposals on or after 6 April 2015 to 5 April 2019: Disposals of a UK Residential Property Interest: Meaning of "dwelling"

The non-resident CGT legislation defines “residential property” as meaning a building that is used or suitable for use as a dwelling, or is in the process of being constructed or adapted for such use (Sch B1/para 4).

Where land is, or is intended to be, occupied or enjoyed with a dwelling as a garden or grounds (including buildings or structures on the land), it is taken to be part of that dwelling (Sch B1/para 4(2)). Disposals of gardens and grounds are subject to non-resident CGT in the same way as a disposal of the dwelling to which they belong.

Non-resident CGT is not charged on disposals of certain types of property that provided residential accommodation. Sch B1/para 4 contains a list of cases where a building is not regarded as used or suitable for use as a dwelling:-

• residential accommodation for school pupils;

• residential accommodation for members of the armed forces;

• a home or institution providing accommodation for children;

• a home or institution providing residential accommodation with personal care for people who are elderly or disabled, or who have or have had alcohol or drug dependency or mental disorders;

• hospitals or hospices;

• prisons or similar establishments;

• hotels or similar establishments;

In addition, institutions other than those listed that are the sole or main residence of their residents are excluded.

Sch B1/para 4(10) sets out the principle that where a building becomes temporarily unsuitable for use as a dwelling, that temporary unsuitability is ignored. The legislation notes, however, that there are exceptions to this rule. These are considered in the discussions below on damage to a dwelling (CG73752) and periods before or during certain works (CG73755).