A Capital Gains Tax (CGT) has been introduced in the United Kingdom by Chancellor George Osborne for foreigners who own property but do not reside there.
The CGT tax of 28% will be introduced from April 2015. It will be imposed on the profit made by overseas investors when they sell their properties in the UK, if it is not their principal place of residence.
At the moment, CGT is only payable by UK residents. Foreigners who do not live in the UK do not pay CGT.
Conversely, foreigners who live in the UK are exempt from CGT if only one property is acquired and that is the sole residence in the UK, under the “principal private residence exemption”.
Harwood Hutton tax advisor Cormac Marum told The Independent that the new CGT could be a boon for property valuers.
“But we have to see yet whether these people will be able to make their UK property their main residence and get around the new tax. That way they would not have to pay the CGT,” he said.