Capital Gains Tax (“CGT”) for non-residents
This relates to the CGT charge for non-residents disposing of UK residential property. The current legislation appears to be defective, as in some circumstances it is possible to incur a double tax charge. This unintended situation is to be corrected retroactively to 6 April 2015. (Prior to that date, non-residents were not liable to CGT on such transactions.)
The government will give HMRC the power to prescribe circumstances when a CGT return is not required by non-residents.
Stamp Duty Land Tax (“SDLT”)
Following the announcement in the July 2015 Budget that income tax relief for finance costs will be restricted for individuals who receive rental income from UK residential property, the Government has announced a higher rate of SDLT on purchases of residential buy-to let properties and second homes.
Effective 1st April 2016, purchases of additional residential properties over £40,000 will be subject to SDLT at a rate of 3% above the current SDLT rates.
A consultation is due to take place regarding the changes, including a potential exemption in respect of residential property development businesses.
Another consultation will be held with a view to reduce the filing and payment deadline of SDLT from 30 days to 14 days. These changes are expected to take effect during the 2017/18 tax year.
Annual Tax on Enveloped Dwellings (“ATED”)
The government intends to extend the reliefs available from ATED and the 15% higher rate of SDLT to equity release schemes (home reversion plans), property development activities and properties occupied by employees from 1 April 2016.
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