The United Kingdom will implement several new tax schemes next month targeting residential property held by non-UK residents. Particularly significant is the introduction of the new capital gains tax (CGT) and new categories for the Stamp Duty Land Tax (SDLT).

The CGT rules, effective on 6 April 2015, will impact property used or suitable for use as a dwelling including residential property held for letting. Commercial properties are exempt from the new CGT as are certain types of student accommodations. Prior to the new regulations, residential property held by non-UK residents was generally exempt from UK capital gains tax.

The new rules were announced by George Osborne, UK Chancellor of the Exchequer. “It is not right that those who live in this country pay Capital Gains Tax when they sell a home that is not their main residence, but those who don’t live here do not,” he told the UK parliament. “That is unfair, so from April 2015 we will introduce Capital Gains Tax on future gains made by non-residents who sell residential property here in the UK.”

The new proposed CGT rates will be 18% and 28% for individuals according to income levels. The company and trustee CGT rates are proposed at 20% and 28% respectively. The new Stamp Duty Land Tax (SDLT) rates took effect in December 2014 providing a multi-tiered progressive structure of 0% on sales under £125,000 to a rate of 12% for values over £1,500,001.

“Owners of existing UK properties need to obtain proper valuations now“, states Patrick ONeill CEO of the ONEILL Group Hong Kong. “The valuations will be used for the future gain calculations. It is critical for investors to seek profession tax advice and take action prior to the April deadline”, he says.

ONeill predicts that the CGT exemptions may lead to increased sales of some properties. “Certain types of commercial properties, REITS and student accommodations may actually benefit from the changes. From a taxation perspective, the CGT exemptions certainly make these classes more attractive that the common buy to let flats”, he concludes.

The ONEILL Group Hong Kong is hosting a series of UK property seminars throughout March and April discussing the new tax rules, market trends and investment analysis. More information is available at or by calling 852 3103 1008.