The government has published its long-awaited final proposals for CGT on non-UK residents owning UK residential property. Legislation for the proposed CGT charge on non-residents who dispose of UK residential property will be included in the draft Finance Bill 2015, published on 10 December. The charge is due to take effect from April 2015. A new rule will restrict private residence relief for jurisdictions in which an individual is not tax resident and will apply both to non-residents disposing of UK properties and UK residents disposing of properties outside the UK.
The addition of a ‘close companies’ test to prevent institutional investors falling within the charge was announced in July 2014, following the main consultation.
Kyra Motley (Taylor Wessing) called it a ‘fundamental change’ for non-residents, adding: ‘It is only now that we have confirmation that it will go ahead, and non-UK residents will have to pay CGT when disposing of property from 6 April 2015 … It’s unlikely that we’ll see an impact on the London property market in the short-to-medium term: London will remain an attractive place to hold property, but long term this could affect the attractiveness of “bulk” property purchases, particularly those bought off-plan.’
The government has published its long-awaited final proposals for CGT on non-UK residents owning UK residential property. Legislation for the proposed CGT charge on non-residents who dispose of UK residential property will be included in the draft Finance Bill 2015, published on 10 December. The charge is due to take effect from April 2015. A new rule will restrict private residence relief for jurisdictions in which an individual is not tax resident and will apply both to non-residents disposing of UK properties and UK residents disposing of properties outside the UK.
The addition of a ‘close companies’ test to prevent institutional investors falling within the charge was announced in July 2014, following the main consultation.
Kyra Motley (Taylor Wessing) called it a ‘fundamental change’ for non-residents, adding: ‘It is only now that we have confirmation that it will go ahead, and non-UK residents will have to pay CGT when disposing of property from 6 April 2015 … It’s unlikely that we’ll see an impact on the London property market in the short-to-medium term: London will remain an attractive place to hold property, but long term this could affect the attractiveness of “bulk” property purchases, particularly those bought off-plan.’
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