Concrete Analysis | Year of major change for British property taxes
From April, non-residents selling British residential properties will be subject to the same capital gains implications as sellers living there
This year is shaping up to be one of property tax revolution in Britain, with three of the key taxes undergoing major changes, some of which will directly affect non-residents.
The rate of tax will be the same for expatriates as for British residents and will be applied at two rates - 18 per cent on chargeable gain for basic-rate taxpayers and 28 per cent for higher-rate taxpayers. Individuals and trustees, whether British residents or expatriates, will have the same annual exemption. The annual exempt amount for the 2014-15 tax year is £11,000.
Both British resident and non-British resident taxpayers will be prevented from designating a British property as their principal private residence, unless they have lived in the property for at least 90 days during the past year. Sellers will only have 30 days after the sale to calculate and pay the tax, although they will then have up to 12 months to amend this. Penalties will apply for late payment and underpayments that are later corrected.
There are also upcoming changes to the annual tax on enveloped dwellings (ATED), applicable to both British and non-British resident corporate owners. From April, ATED will apply to residential properties worth more than £1 million, a reduction in the threshold, which was originally set to £2 million. The threshold for the ATED charge will then be reduced further to £500,000 from April 1 next year.
