United Kingdom

High Value UK Residential Property 

UK residential property ownership, particularly property worth more than £2 million, has become an essential area in which to ensure you fully understand tax liabilities.
Residential property

Further changes are on the horizon. During the Autumn Statement in December 2013, the Chancellor announced that from April 2015, non-residents disposing of UK residential property will be subject to Capital Gains Tax (CGT). This is the reversal of a near 50 year old policy and from 2015 will align the UK with many other countries.


New consultation due


A consultation on how best to introduce this new charge is expected in early 2014. Until the consultation proposals and draft legislation are published, it will not be known how the government intend that this new tax charge will apply.


The Autumn Statement announcement provides little detail. For example, it is not yet clear if non-resident individuals, trustees and companies will all be included within the charge or how the new rules will interact with existing legislation. It is also uncertain if there will be a ’rebasing’ election to remove the element of capital gain accruing before the introduction of changes. However, as the announcement does refer to future gains, it is hoped that the new rules will only apply to future growth in value.


Recent changes


This new announcement follows the very recent changes for high value residential property. From 6 April 2013, CGT is charged on non-UK resident, non-natural persons (broadly companies, partnerships with corporate members and collective investment schemes) disposing of UK residential property for more than £2 million. It is possible that the April 2013 rules, and the various reliefs agreed, could be made largely redundant after just two years.


It is welcome that non-resident owners have not become immediately chargeable to CGT on the disposal of UK residential property from the date of the Autumn Statement. This should allow affected individuals time to review the situation before deciding how to respond to the new rules.


What action should you now consider taking?


The forthcoming change from April 2015 extending the scope of CGT to include non-residents who own property directly could influence how residential property is owned. Currently, only high value residential property held by non-natural, non-resident persons is subject to CGT. The extended CGT scope to include property held directly by non-residents will be an additional consideration that could add further complexity when owning residential property.


Understanding the aims and requirements of the property owner are key to providing the most suitable advice. For example, is the property intended to be used as a long-term family residence or is it more of a shorter term investment?


If you already own UK residential property, particularly property worth more than £2 million or you wish make such an acquisition, these rules could affect you. If you are, please call your usual KPMG contact or any of the individuals listed in the attached publications.

Contact us

Mike Walker

Mike Walker


KPMG in the UK

020 7311 8620


How we can help