Capital Gains Tax changes cause concern amongst property investors

A new study has revealed that 61 per cent of property investors admit they are concerned about the impact of Capital Gains Tax on non-resident investors in UK real estate.

The survey revealed that, ahead of the changes to Capital Gains Tax (CGT) in April 2019, 32 per cent intended to alter their portfolio structure with a further 22 per cent considering their options.

Under the regime, non-resident investors will pay CGT on disposals of all types of UK real estate.

This will go beyond taxing direct disposals and will also apply to disposals in ‘property rich’ entities where the person making the disposal holds, or has held in the last five years, at least a 25 per cent interest in the property rich entity.

This will mirror existing rules that currently apply to residential property, creating a single regime for disposals of commercial and residential real estate and removing any disparities between UK and non-UK based investors.

Despite these concerns, 40 per cent of investors confirmed that they had maintained or increased their investment in UK property over the last 12 months – ensuring that the UK remains one of the leading locations for overseas property investment.

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This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.