CGT charge introduced for non-residents selling UK property
Papers released as part of the chancellor’s Autumn statement reveal financial advisers will have to wait until early 2014 for a consultation paper to be published on how HM Revenue and Customs will chase expats for CGT.
Damian Bloom, partner at international law firm Berwin Leighton Paisner, said it was important to note the changes to the capital gains tax regime would impose additional tax on residential property held by non-UK resident individuals only from April 2015 and on future growth.
Mr Bloom said: “This will be perceived as an appropriate leveling of the playing field compared to UK resident individuals, and is not out of step with other major economies.
“However, these reforms ought to have been considered as part of last year’s extensive consultation on the taxation of UK property held by non-resident entities.
“In order to prevent any further undermining of the stability of the UK tax regime for international individuals, it would be helpful if the government could confirm whether there will be any further changes to the taxation of residential property for the remainder of the current parliament.”
HM Treasury has also confirmed for capital gains tax private residence relief, the final period exemption now applies to a property that has been a person’s private residence at some time even though they may not be living in the property at the time they dispose of it and they may be claiming private residence relief on another property at the same time.
From 6 April 2014 the final period exemption will be reduced from 36 months to 18 months.
The annual CGT exempt amount will be £11,000 for the year 2014 to 2015 and £11,100 for 2015 to 2016 and subsequent years.
The exemption for most trustees will be £5,000 and £5,500 respectively.