1. As widely anticipated, the
Chancellor has announced today that UK capital gains tax will be levied, from 6
April 2015, on gains made by non-UK residents disposing of UK residential
property, regardless of value.
This brings the tax treatment of individuals in
line with the treatment for non-UK resident corporate entities selling UK sited
property of value over £2million after 6
April 2013. It is anticipated that
capital gains tax will now be extended to companies and other entities within
the scope of the existing charge which sell a UK residential property of any
value.
We have very little detail relating
to these proposals at this stage and the Government has announced that it will
be consulting on the measures with a consultation document then due out by
April 2014. Possible areas open for
discussion are:
·
“re-basing”
by charging capital gains tax only on gains relating to the period from
April 2015 to the date of sale
·
applying
the capital gains tax charge only to properties acquired after April 2015
(highly unlikely in our opinion!)
2. Currently, the last 36 months period
of ownership of a principal private residence is treated as if it were the
taxpayer’s main home, regardless of whether he lives there or owns another
property.
The Chancellor has announced today that this
exemption period is to be halved to just 18 months from 6 April 2014. This could significantly increase some
taxpayers’ capital gains tax liabilities if, for example, there is a delay in
the sale of the property.
If you require further advice
on any capital gains tax issue or planning for future disposals, then contact
ppeterson@petersonsims.com or
gsims@petersonsims.com