The 2013 Autumn Statement did not bring many surprises. The one announcement that\u00a0was widely predicted, the introduction of capital gains tax (CGT) on foreign owners selling\u00a0residential property in the UK, was included as anticipated. Whilst the actual rate has not\u00a0yet been announced, it is likely to be 18% or 28% depending on the amount of the gain to\u00a0match the rate applicable to residents in the UK. Thankfully this new tax will be assessed\u00a0from the point of the tax\u2019s introduction or the date of the property purchase, whichever is the\u00a0latter. Furthermore, the tax will not be introduced for a further 18 months to allow for a full consultation.<\/p>\n
The Treasury has already acknowledged that the new tax will not raise much revenue but it\u00a0is designed to make the tax system fairer. CGT is currently liable on second homes owned\u00a0by UK residents but not on homes owned by foreign residents. The move is also intended to\u00a0cool a housing maket that some fear is in danger of overheating.<\/p>\n
Vidhur Mehra of Benham & Reeves\u00a0Estate Agents comments, \u201cThere is still a\u00a0consultation process to be undertaken which means the actual format of the legislation may\u00a0be very different to what is actually suggested. When new taxation rules have previously\u00a0been announced, their eventual introduction saw a number of exemptions meaning buy-tolet\u00a0investors were exempt. We anticipate that with this new CGT, the details will prove to be\u00a0important. However, it does seem that it will only be applicable to future gains and we firmly\u00a0believe that even if it does affect all overseas investors, it will not dampen their appetite for\u00a0London property. A tax on gain is just that; the majority of the gain still goes to the investor.\u201d
\nBy Vidhur Mehra, Finance Director<\/p>\n","protected":false},"excerpt":{"rendered":"
The 2013 Autumn Statement did not bring many surprises. The one announcement that\u00a0was widely predicted, the introduction of capital gains tax (CGT) on foreign owners selling\u00a0residential property in the UK, was included as anticipated. Whilst the actual rate has not\u00a0yet been announced, it is likely to be 18% or 28% depending on the amount of … <\/p>\n