On 5th December 2013, the Chancellor of Exchequer, George Osborne has confirmed that overseas property investors would face capital gains tax (CGT) on profits on sale of UK properties from April 2015 onwards. At present, only UK citizens and residents would pay CGT on profits made on sale of second homes at 18% for basic rates and 28% for higher rates tax payers.
The bullet points below summarizes the effects of the new change in CGT rules:
- Only future increases in value of the property after April 2015 would be subject to the new CGT change, NOT any previous growth.
- The new rule applies not only to foreign property investors, BUT also on UK expats who sell their properties in UK while based overseas.
- Currently, investors selling a property which has previously used as their main residence can utilize some of the private residence relief for the last three years of ownership. However, from April 2014, anyone selling a property they have not lived in for more than 18 months will face a higher tax bill instead.
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