Chancellor changes rules on capital gains tax for non UK residents
The Chancellor George Osborne has said that the government will change the rules on non UK residents in 18 months time. Currently the rules are deemed as unfair because a non resident UK property owner may buy and sell a property in the UK without paying any tax on ant profits. The same does not apply to UK residents who have to pay capital gains tax when they buy and sell a property and make a profit. The move has been welcomed by UK investors who have long said that the regime is unfair and favors overseas landlords. There are many people that believe that this has been a major driver in house price increases in the capital as overseas buyers look to take advantage of the favorable tax regime.
This is seen as an attempt by the government to level the playing field and to treat UK residents fairly. It is also hoped that this may reduce the demand for property in the capital and quell the price increases that we have seen so far in 2013. 60% of the homes that have been sold in London have been sold to overseas buyers and most of those sales have been purchased with cash. Whilst this will be welcomed by London property owners it is pushing Londoners out of London and London workers are being forced to commute because they can’t afford to live in the capital.