Not that simple

KEY POINTS

• The charge will affect residential properties only.
• Defining “dwelling” may cause problems.
• Only or main residence relief altered or scrapped.
• Possible withholding tax when a property is sold.

The long-awaited consultation document Implementing a capital gains tax charge on non-residents was published on 28 March by HM Treasury and HMRC. The plan is to introduce the charge from April 2015 to gains arising from that date.

In the foreword to the document Treasury minister David Gauke states: “It is important for the integrity of our tax system that when gains are made from UK residential property UK tax is paid.” However he also acknowledges that “this change is not straightforward to introduce”.

The reasons why the change is “not straightforward” will be considered in this article. While the policy...