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The Chancellor announces CGT on overseas ownership of UK property

9th December 2013

His exact words were:

"Britain is an open country that welcomes investment from all over the world, including investment in our residential property. But it's not right that those who live in this country pay capital gains tax when they sell a home that is not their primary residence - while those who don't live here do not.

"That is unfair. From April 2015, we will introduce capital gains tax on future gains made by non residents who sell residential property here in the UK."

They key words to note in this are "future gains". This means that only gains made on the property from the April after next will be taxed and the enormous gains achieved over the last few years will be UK tax free for overseas owners.

What will this mean for Prime London? To me the demand for London as a safe haven for overseas cash seems so great that I do not see this "closing of a loophole" having a major effect on the market. There may be some holders of properties for whom a taxable income may deter them from holding London property but they would always have to find another safe haven in the world for their money with a track record that matches London's, and that is far from easy.

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