• Service: Tax, Global Indirect Tax, Global Mobility Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 8/11/2014

United Kingdom - Proposed CGT relief for large-scale institutional investors 

August 11: The UK government issued a clarification that large-scale institutional investors would not be subject to a capital gains tax (CGT) charge, proposed to apply on dispositions of UK residential property beginning April 2015.

The 2013 Autumn Statement announced that non-residents disposing of UK residential property would be subject to a capital gains tax (CGT) charge. An update on a consultation (published 31 July 2014) includes a high-level announcement as to how the government intends to determine that large-scale institutional investors would not be caught by this new charge—thus, addressing concerns raised by a number of respondents to the consultation. The government said that it intends:

…to introduce a form of “close company” test to limit the scope of the extension of CGT to non-residents…. the extension of CGT will not apply where a disposal of UK property is made by a diversely held institutional investor that holds UK residential property directly, or by one which invests indirectly through an arrangement that is not controlled by a few private investors.

Read an August 2014 report [PDF 843 KB] prepared by the KPMG member firm in the UK: Weekly Tax Matters (8 August 2014)

Other discussions in this KPMG report concern:

  • OECD releases public request for input on BEPS Action 11
  • HMRC’s anti-avoidance strategy – the next squeeze
  • HM Treasury / HMRC patent box survey
  • First-tier Tribunal decision in indirect tax case
  • Draft taxation of pensions bill
  • Consultation on restriction of UK personal allowances for non-UK residents
  • OTS recommendations on accommodation benefits and termination payments
  • HMRC withdraws the “masking principle” for UK relevant debts

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