In November 2014 the UK published its response to last year’s consultation on the introduction of capital gains tax on non-residents disposing of UK residential property. This legislation took effect in April 2015.
As a result of the consultation it was decided to exempt most institutional investors from the proposed capital gains tax on property sales to be levied on non-residents in order not to discourage foreign investment in UK housing. Therefore only individuals, trustees and closely held non-resident companies and funds will be subject to this charge, companies and funds which are not closely held and most types of institutional investors will not be subject to this.
In order to continue to encourage large scale institutional investment the government has introduced close company tests to identify this and limit the extension of capital gains tax to non-residents. These tests ensure that diversely held companies and qualifying institutional investors will not need to pay these new charges.
If you are concerned that these charges may affect any future disposal of residential property held in the UK please feel free to contact us and discuss by clicking on the link below.