The government’s announcement in the 2013 Autumn Statement is now nearly 12 months old, and yet there is a lot still not known about the detail of how overseas investors will be charged for the gain arising from their property disposals after 6 April 2015.
We have received a number of enquiries from our overseas clients about the forthcoming changes, and even though the final proposals have not yet been published a number of our clients have committed to disposing of their UK properties before April 2015.
Since the Autumn Statement in December 2013 it can be argued that not a lot has happened. Their consultation period ended in June of this year, and so far all that can be gleaned is that the tax is likely to catch non-resident UK individuals, companies and trustees and will be based on the increase in value of residential properties post April 2015. There is not, at least currently, a proposal that charge be retrospective. It seems likely that the charge will be applied at one of the current prevailing rates of 18% or 28%.
A number of overseas investors are taking the view that CGT on any gains that arise after April 2015 will in fact be cancelled out by the positive effects of currency variations, but nevertheless, we are seeing an increase in instructions to sell.
It seems likely that this year’s autumn statement will add some “flesh to the bones”, and we will update our clients when the full proposals are known.