CGT extension — some good news (at last)
By James Quarmby
While the guys in the commercial property bunker haven’t seen any action in years, over here in the residential property bunker we’ve had our heads down for ages, listening to the sound of tax bombshells cracking overhead. After the onslaught of super-rates of stamp duty land tax (SDLT), the annual envelope charge and ATED-related gains, not to mention the ever-present threat of a ‘mansion tax’, it’s been quite a campaign. You can imagine my surprise when a few weeks ago we woke up to a clear, quiet morning — hostilities had abated, albeit temporarily.
HMRC released its preliminary views of the capital gains tax (CGT) consultation exercise and it seems there has been an outbreak of generosity towards taxpayers, or some of you anyway. The original consultation proposals were notable for their harsh ‘no exceptions’ approach to the extension of CGT to non-resident owners of UK residential property.
Now we are told that ‘the government wants to continue to encourage large-scale institutional investment into a much needed development and supply of housing in the UK’. This is rather odd, since the original proposal made it clear that the extension would apply even to large property developments consisting of multiple dwellings. Anyway, we are told that they will introduce a new form of ‘close company’ test to limit the scope of the extension of CGT to non-residents…
Click on the link below to read the rest of the Stephenson Harwood briefing.
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