The Chancellor on Thursday launched what was quickly dubbed an “oligarch tax” by slapping capital gains tax on foreigners when they sell UK properties.
The move could take some of the heat out of the London property market, which has been substantially driven by wealthy foreign investors. Foreign investors have been big buyers both at the premium “One Hyde Park” end of the market and in the purchases of blocks of flats for rental purposes.
George Osborne specified it would not be enacted until April 2015. That means there could be an increase in sales of properties in the coming year.
The taxable gain would only be counted from increases in the value after that date.
Cormac Marum, tax adviser at Harwood Hutton, said: “This could be a boon for property valuers. But we have to see yet whether these people will be able to make their UK property their main residence and get around the new tax. That way they would not have to pay the CGT.”
The tax may prove tricky, and expensive, to collect from investors living in Monaco and elsewhere, tax experts cautioned.Reuse content