Will CGT for non-residents lead to more sales before April 2015?

by Readers Question

12:24 PM, 1st October 2014
About 4 years ago

Will CGT for non-residents lead to more sales before April 2015?

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Will CGT for non-residents lead to more sales before April 2015?

Foreign owners of UK residential property face a new capital gains tax (CGT) if they sell after 6 April 2015. Will CGT for non-residents lead to more sales before April 2015?

Some property experts believe sales will rise ahead of this date, pushing up the supply of available London property this year.

Has anyone seen evidence of this yet?

Regards

David



Comments

Mark Alexander

12:33 PM, 1st October 2014
About 4 years ago

Hi David

Thant's a very interesting question!

Earlier this year I took an all expenses paid trip out to Malta to deliver a conference to a group of ex-pat property investors. This subject was part of my presentation but it was the first they'd heard of it. Needless to say, this sparked intense discussion and ideas such as trading properties between themselves before the deadline date were discussed in order to establish new base prices. However, as is often the case, apathy seems to have struck and to my knowledge none of them have taken action to date. April 2015 will be upon them faster than they realise so I hope for their sakes they will pull their fingers out and get on with it.

One of the biggest dilemma's for this group was having to repay cheap tracker rate mortgages which were entered into pre-credit crunch and replacing them with more expensive alternatives and the inevitable fees. Many were concerned at whether refinancing would be possible at all. As you might suspect, a lot of spreadsheets were created to analyse viability of switching vs swallowing the CGT at a future date based on a multitude of variables.
.

Stephen Reynolds

13:53 PM, 1st October 2014
About 4 years ago

Reply to the comment left by "Mark Alexander" at "01/10/2014 - 12:33":

I looked into this over the Summer as I am technically non resident and as a foreign national may have been caught in this. The advice I have had is that any gain will be calculated from April 2015. So long term holders of property, i.e. those of us that have made substantial gains over the previous 10 - 20 years shouldn't have a problem as the tax man will consider the value of the property as from next year. Now I haven't been able to find much more than this and they could still change their minds however there are few precedents for introducing a tax that is applied retrospectively. Would be interested if anyone else has heard differently.

Mark Alexander

14:27 PM, 1st October 2014
About 4 years ago

Reply to the comment left by "Stephen RV7" at "01/10/2014 - 13:53":

Hi Stephen

I hope you're right but it sounds like hopeful speculation at best to me. I definitely wouldn't be relying on this to make plans if I were you and certainly not unless you can get a qualified a very well insured tax adviser to put that advice in writing to you.
.

Rony Aga

8:20 AM, 2nd October 2014
About 4 years ago

As a foreign investor in the UK this new tax of capital gains don't affect me at all since i have to pay 25%
capital gain tax in my country if i don't pay a capital gain at the UK so this new tax will affect different every foreign investor depend on the taxes lows on his country.

Martin Rdg

7:45 AM, 7th October 2014
About 4 years ago

I read somewhere that the CGT would be payable on gains accrued after the 5th April 2015.

What is not clear is how will they collect the tax. eg a Chinese investor sells his flat in London and is liable for say 50k tax - I cannot see him volunteering to pay the tax. How can the government force him to?? I cannot see the new rules raising a lot of tax - just my opinion.


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