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The government has published an update to the consultation Implementing a Capital Gains Tax Charge on Non-Residents, covering the extension of capital gains tax (CGT) to non-resident individuals and close companies.
The consultation, launched in March, explained how pension funds and other diversely owned collective investment funds were not intended to be brought in scope of the extension of CGT to non-residents.
The government has published an update to the consultation Implementing a Capital Gains Tax Charge on Non-Residents, covering the extension of capital gains tax (CGT) to non-resident individuals and close companies.
The consultation, launched in March, explained how pension funds and other diversely owned collective investment funds were not intended to be brought in scope of the extension of CGT to non-residents.
A close company test to limit the scope of the extension of capital gains tax to non-residents is set to be introduced to ensure the charge will not apply where a disposal of UK property is made by a diversely held institutional investor that holds UK residential property directly, or by one which invests indirectly through an arrangement not controlled by a small group of private investors.
The Chartered Institute of Taxation (CIOT) welcomed the announcement, but tax policy director Patrick Stevens said problems remained with the legislation specifically regarding main residence relief and the annual tax on enveloped dwellings.
“HMRC’s proposal to withdraw the only or main residence election for all taxpayers continues to alarm the institute. If the plans were to go ahead, then UK residents could be faced with CGT charges on their first or second properties, with no certainty as to which is which.”
