Nearly two thirds of real estate investors are concerned by the impact of changes to UK Capital Gains Tax (CGT) according to a report commissioned by Intertrust.
The Government has recently published its response to the consultation alongside draft legislation covering some but not all aspects of the changes to the UK taxation of capital gains realised by non-residents from disposals of UK property.
As part of the Autumn Budget on 22 November 2017, the UK Government announced significant changes to the UK taxation of capital gains realised by non-residents from direct and certain indirect disposals of UK property which will have effect from April 2019. The new rules have the potential to impact significantly on the UK tax liability of non-residents holding real estate.
There will now be a further technical consultation on the draft legislation and the Government’s proposals but it is not anticipated that the main proposals will be amended significantly before they are put in place.
It appears that the Government has listened to feedback from the initial consultation concerning various perceived problematic aspects of the original proposals but with less than a year before the implementation, non-resident investors in UK property should be considering the potential impact of these changes for their existing and planned investments and if it might be necessary to consider a restructuring of existing arrangements.