In his Autumn statement George Osborne announced Government plans to introduce Capital Gains Tax for non-residents selling UK residential property. Their long-awaited consultation document was published Friday 4th April, and we can now comment more precisely on the proposals.
For many years, non-resident investors have been exempt from Capital Gains Tax on the sale of UK assets provided they meet a minimum qualifying period of five tax years of non-resident status. The Government’s proposals will remove this exemption for non-residents selling (or gifting) residential property in the UK.
The Consultation process has only just started, and The Fry Group will be playing a full part throughout. We fully expect the proposals to be modified and adjusted based on how the consultation is responded to, and we may yet find that the Government decides to introduce some sort of relieving provision.
However, the Consultation Document gives us fair warning of what is to come, and as such provides a window of opportunity to plan and take action, namely:
•Establishing the level of accumulated gains and reliefs which may apply and calculating the current and projected exposure to CGT.
•Establishing the effectiveness of your UK properties as investments – calculating net income yield and annualized asset growth, comparing this to expected and on-going costs, to arrive at a reasonable view about the asset strength as a continuing investment proposition.
•Establishing how your property can be re-valued for Capital Gains Tax purposes so that any previous accumulations of gains become tax-free.
To find out more about these changes in taxation and how they could affect you, register for our forthcoming workshop: