PRESS RELEASE: Government to introduce Capital Gains Tax (CGT) on the sale of UK residential property by non-UK residents

06 Dec 2013

In his Autumn Statement today, Chancellor George Osborne announced that from 6 April 2015, Britain will impose CGT on foreign investors selling homes in the UK. Currently no CGT is payable on these assets.

The government made some changes to CGT last year, introducing new rules which subjected certain companies, partnerships and investment schemes, including those based abroad, to CGT on the sale of UK residential property worth more than £2m.

From 6 April 2015, all non-UK residents will be subject to CGT on the sale of UK residential property, although the detail is unclear at this stage and there will be a consultation in early 2014.

For a long time, non-UK residents have seen the London property market as a prime location to buy property as a secure investment. George Osborne has said the move will help to curb soaring house prices in London by stemming the tide of foreign investment.

Commenting on the change, partner and Head of Real Estate, Janet Armstrong-Fox said "Without a doubt, in the short term, some non-resident owners will review their position and sell prior to the implementation of the changes, but this in itself will create an opportunity by unlocking some much needed prime properties onto the market. Generally tax is not a primary factor in the attractiveness of high-end London to overseas buyers. International families will continue to clamour for the capital's business, social and educational opportunities."

ENDS

Contacts:

Janet Armstrong-Fox, Partner and Head of Real Estate, Collyer Bristow LLP. Telephone: (0)20 7468 7221

Paul Newhall, BD Director, Collyer Bristow LLP. Telephone: (0)20 7470 4422.

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