UK’s tax charge on foreign realty buyers will weigh heavy
The UK has historically been a very attractive jurisdiction for international real estate investment. One of the factors behind this has been a relatively benign tax regime. However, from April 2019, overseas investors in UK real estate will find they are subject to a new tax charge. In a move that has been described by the UK government as “levelling the playing field” between domestic and overseas owners of UK property, capital gains tax will apply to disposals of UK real estate by non-residents. The timing so close to the UK’s withdrawal from the EU (March 29, 2019) has been questioned. Arguably, the UK is merely playing catch-up with other major jurisdictions that already exert similar taxing powers, prevalent across many European jurisdictions and the US. Importantly, the charge will only apply to gains that accrue after April 2019. To protect against the charge applying to historic gains, investors will be able to “rebase” the cost of their asset to the market value as of April 2019.
Tags : INTERNATIONAL