Historically, non-resident individuals, companies and trusts have not been liable to Capital Gains Tax (CGT) on gains arising from the disposal of residential property.
This began to change from last April with the introduction of the Annual Tax on Enveloped Dwellings (ATED), which is an annual CGT charge on personal-use residences worth more than £2m if owned via a limited company.
The government has recently published proposals to charge CGT on any disposals of UK residential property disposals taking place after April 2015, whether or not they are used as a second home or rented out.
Any gain arising, can potentially be covered by Principal Private Residence relief (PPR) where the property is or has been their main residence. Individuals owning more than one residential property can currently submit a claim to HMRC effectively choosing which property the PPR election applies to. However, there is a further proposal to remove the right of a PPR election, so that the availability of the exemption is based on a question of fact rather than choice.
Non-resident individuals owning UK residential properties therefore need to consider whether such properties would qualify for PPR relief before the new rules come into effect.
Our Private Client team are an experienced team of tax and legally qualified advisers, who are dedicated to looking after your personal and business interests. By safeguarding assets for the long-term and structuring of Wills and trusts tax efficiently, we can meet your objectives. If you would like to discuss your will, then our Private Client team would be happy to help.
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Rachael Dronfield
Prior to joining Shorts, Rachael gained 13 years’ experience with Grant Thornton, specialising in inheritance tax, will planning and trust matters. Widely acknowledged as one of the leading private client advisers in the region, Rachael has considerable technical knowledge and experience. Rachael is a Chartered Tax Adviser, with an advanced qualification and full membership of the Society of Trusts and Estate Practitioners. Coupled with a Diploma in Financial planning, she is perfectly placed to advise individuals and trustees on tax planning opportunities, estate planning and investment strategies. Rachael’s appointment as private client director in January 2014, was a direct response to the growth experienced within the inheritance tax and financial planning sectors, and Shorts’ commitment to strengthening our Private Client team of Wealth Planner and Tax Advisers.
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