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Offline Maz  
#1 Posted : 09 October 2014 09:28:55(UTC)

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The Government said around a year ago that they were planning to bring in a charge to Capital Gains Tax on non residents?

Anyone have an update on when this is coming in an a link to the new rules for CGT on non residents?


Offline TaxGuru  
#2 Posted : 14 October 2014 09:35:53(UTC)

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Hi Maz

Hopefully the follow outline of the current state of play (as at 14 October 2014) on the Governments proposed new rules for CGT on non residents will help:
28 March 2014 - Initiated

The consultation

The UK government has announced that, from April 2015, non-residents disposing of UK residential property will be subject to a capital gains tax charge. This consultation sets out the proposed scope of the regime and likely design features, and seeks views on the approach proposed and potential impacts.

31 July 2014 - Consultation Concluded

Current Status:

" The government recognises that the extension of CGT to non-residents is a significant reform and that it is important that individuals, advisors and companies have certainty about the scope and impacts of the regime as soon as possible. Therefore, we will publish a full response to the consultation in early Autumn 2014.

A Brief Summary

What is meant by residential property?

2.3 The government intends to focus the extended CGT charge on property used or suitable for use as a dwelling i.e. a place that currently is, or has the potential to be, used as a residence. This will include property that is in the process of being constructed or adapted for such use, in line with the definition in the ATED regime (although, where residential property is developed as part of a business, normal considerations will first be given as to whether any gains should be properly taxed to income or profit, rather than to CGT). The government does not intend to change the tax treatment for property, such as office and industrial buildings, which cannot be used as and are not in the course of being converted to a place to live.

2.4 However, it would not be right to exclude all disposals of property used for commercial purposes, for example residential property used to generate income from letting. UK residents pay CGT when they sell a home that is not their main residence, including residential property that they have bought for rental purposes. The government believes that it would be unfair to charge CGT on residential property disposed of by a UK person who has the property as a second home, and not to do likewise when an equivalent residential property is disposed of by a non-resident landlord. The government also believes that gains made on disposals of residential property used as an investment should be subject to CGT.
2.5 In this respect, the CGT charge on non-residents will differ from the approach the government has introduced for enveloped property where ATED and the ATED-related CGT charge1

Residential property with communal use do not apply to property rental businesses. For the measures introduced as part of the ATED regime, it was appropriate to exclude genuine businesses from the scope of the charge, as the main focus was the avoidance of SDLT through holding property in corporate envelopes.

Proposed Exclusions

  • accommodation for children and students: use as a home or other institution providing residential accommodation for children; residential accommodation for school pupils; or as a hall of residence for students in further or higher education

  • accommodation to provide care: use as a home or other institution providing residential accommodation with personal care for persons in need of personal care and nursing by reason of old age, disablement, past or present dependence on alcohol or drugs or past or present mental disorder; a hospital or hospice

  • other communal accommodation: use as communal residential accommodation for members of the armed forces; other institutions that are the sole or main residence of at least 90% of its residents; and prisons or similar establishments

The Consultation Process Required Submissions by 20 June 2014.

The consultation is being conducted in line with the Tax Consultation Framework. There are five stages to tax policy development:

• Stage 1 – Setting out objectives and identifying options
• Stage 2 – Determining the best option and developing a framework for implementation including detailed policy design
• Stage 3 – Drafting legislation to effect the proposed change
• Stage 4 – Implementing and monitoring the change
• Stage 5 – Reviewing and evaluating the change

In Summary As At Mid October 2014

The new rules that the Government has said are to apply from April 2015 have yet to be announced following the consultation process that took place between March and June 2014.

The new rules could be announced at late as the March 2015 budget speak and any time between now and then.

thanks 1 user thanked TaxGuru for this useful post.
Maz on 14/10/2014(UTC)
Offline Maz  
#3 Posted : 14 October 2014 09:39:38(UTC)

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Thanks for that reply to my forum post.

Well set out summary and links.

Thanks and appreciated.

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