A new tax on capital gains for non-residents in the UK

The head of Financial services of great Britain George Osborne made 05.12.2013 official statement in which he announced that the decision on introduction of a tax on capital gains for individuals ( the Tax on capital gains in the UK) that the UK is not an official place of residence.

The information that is preparing a change in the tax legislation of the United Kingdom, has long been discussed in the press, but only yesterday was followed by the official announcement. Osborne announced that it is taking place at present, the exemption of non-residents from tax on capital gains will be abolished from April 2015. In fact, in this case only corrected the injustice in taxation between non-residents and residents. British citizens have long are payers of this tax on capital gains and the existing exemption applied only to foreign nationals.

In addition, such a tax exists in all the major centers of investment in the world, including new York and Paris, where similar tax ranges from 35% to 50% depending on the residency status of the property owner.

More information how is a tax, who is the subject and what will be rates will be published in early 2014.

According to many specialists of the real estate market in the UK, the decision to introduce such a measure will not have a strong effect on demand in the London property market and on pricing. Favorable tax atmosphere that takes place now in the real estate market in the UK is not the only driving factor for international buyers of residential property in London. Investors in the UK also attracts a favourable political environment and a stable exchange rate of the pound sterling.

Today an average of 28% of property buyers in Central London are non – residents. If you take the whole of London, then the share of such buyers is about 12% of all buyers now. Of course, presents a new tax will give a negative signal to the market and foreign investors will have to consider other options for investing their funds.

On the other hand, most professionals agree that this measure is timely as it will help to stop the rampant rising prices in the market of elite real estate of London and to avoid speculation on the real estate market of London.

It was expected that a big limiting factor for the growth of prices will be to increase stamp duty in 2012 to 7% for expensive real estate, however, the London property market quietly “swallowed” is increasing. Representatives of real estate agencies are hoping that there will be a significant reduction in investor appetite and now.

However, don’t underestimate the influence of foreign investors on the property market in the UK. In the result of unreasoned actions of the authorities, London may lose its competitiveness as the investment capital of the world.

Price indices for UK property

Taxation legal. individuals in the UK

What “Stamp duty”

® Alice Morgan on the 06.12.2013