Previous amendments impacting on non-resident investment in residential property in the UK

As a reminder of the other changes impacting UK residential property in recent years:

6 April 2015 - Capital gains tax extended to non-resident individuals

Non-UK residents became subject to capital gains tax on UK residential property, referred to as non-residents capital gains tax (or NRCGT).

This potentially impacts investors in UK residential property, and on UK expatriates if they sell property (including their home) while non-resident of UK.

For further information, please see the previous publication from KPMG in UK.

6 April 2013 - Annual tax on non-resident entities

ATED (Annual Tax on Enveloped Dwellings) rules were introduced to tax residential property in the UK held by a non-resident company, or other holding vehicle. This imposes an annual charge based on the value of the property. Depending on the bracket the property falls into, the charge is approximately 0.5% of the market value.

Initially, the threshold at which this tax starts to apply was set at properties with a value of GBP 2 million or higher. For the year to 31 March 2016, this was reduced to GBP 1 million. For the year to 31 March 2017, the threshold value for properties subject to ATED was further reduced to GBP 500,000.

A property may be relieved from ATED if it is rented to arm’s length tenants.

For further information, please see the previous publication from KPMG in UK.