Generally, non-UK resident individuals are not currently liable to pay CGT when disposing of a UK property.
However, the UK Government recently conducted a consultation on whether non-UK resident individuals should become subject to CGT on the disposal of UK property. The consultation has now concluded and we expect details of any proposed changes to be published in or around the time of the Chancellor’s Autumn Statement, due to take place on 3 December 2014.
Currently the Government has not provided details of the changes it may make. However, we expect that non-UK resident individuals will become subject to CGT on disposals of property on the same basis that UK resident individuals are subject to CGT. CGT is currently taxed with an upper rate of 28% of the gain.
In our view, the legislation is unlikely to be retrospective which will mean that only increases in value after the changes are implemented will be subject to CGT. However, that is not guaranteed and we will need to wait for the Government’s specific proposals to confirm the situation. If the changes are not retrospective, we expect these will take effect from 6 April 2015 which is the start of the next tax year. However, the Government could decide that the changes will be implemented on the day of the Autumn Statement or any other date.
Should you require more detailed advice on the proposed changes or if you would like advice regarding ownership by non-UK companies, which have their own separate rules, please contact our Michael Lindley.