The measure

Capital gains tax will, from April 2015, be chargeable against capital gains made by non-UK residents disposing of UK residential properties of any value.

The Government will consult on how best to introduce the new capital gains tax charge and the consultation document will be published in early 2014.

Who will be affected?

As the Government will be consulting on the introduction of this measure, very little in the way of detail has been provided at this stage, though the main impact is likely to be on non-UK resident individuals and trustees as changes have already been introduced for companies and other entities disposing of UK residential properties. In addition, due to changes which have already been made, from April 2013 companies and other entities are subject to capital gains tax where these entities have sold a property for more than £2million. It is anticipated that capital gains tax will be extended to companies and other entities within the scope of the existing charges which sell a UK residential property of any value.

It is not clear whether any form of 'rebasing' will apply ie charging tax on gains attributable to the period after introduction, by treating the property as acquired at market value from April 2015.

It is also not known whether the charge will only apply to properties acquired after April 2015 (though our assumption is that it will apply to residential properties owned prior to that date).

The interaction of the new rules with the availability of principal private residence relief (which is also likely to change from April 2014) will need to be carefully considered.


From 6 April 2015

Our view

The introduction of this measure has been widely rumoured so the announcement has caused no real element of surprise.

The changes are in line with the capital gains tax treatment in many other countries which already charge tax on the disposal of their real estate by non-residents.

These changes could affect sales prices whilst the market adapts to the changed circumstances.

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