In today’s autumn statement by the chancellor, it was announced that foreigners who buy second homes would now be liable to pay Capital Gains Tax on profits from April 2015. This basically brings the tax rules in line with what UK residents have to pay. This is typically a 28% tax on any rise in value that the property sees when sold.
Of course the devil will be in the detail, for example:
• Will profits be calculated from the date of purchase, today’s announcement or April 2015?
• Will those who “buy and flip” properties before they have completed the purchase be exempt as technically they have never owned the property?
It is noticeable that the government has left such a large window before the rule takes effect. Clearly they want to avoid the debacle that was the announcement and subsequent blithering on Stamp Duty Land Tax and the ATED (Annual Tax on Enveloped Dwellings).
As mentioned in previous missives this announcement is no great surprise and I will let you know when I have the nitty-gritty of the proposals. Nevertheless, please do contact me if you have any questions.