Treasury Considering Further Taxes on Foreign UK Property Owners

This article by Outlaw.com on November 1st, 2013 tells us about  George Orborne's statement to impose additional taxes on foreign owners of UK properties as revealed by press reports.

Sky News has reported that the Treasury is "actively investigating" imposing capital gains tax (CGT) on foreign owners who resell a UK property. Non-residents are currently exempt from CGT on property sales, while UK residents are subject to CGT on profits made when reselling all but their main homes. CGT is charged at 18% for basic rate taxpayers and 28% for higher rate taxpayers.g

A spokesperson for the Treasury told Out-Law.com that the report was "pre-Autumn Statement speculation".

According to the report, bringing foreign-owned properties into the scope of CGT would not raise significant sums, but would address concerns about favourable treatment for overseas property investors. Foreign property owners are liable for CGT in many other European countries.

Around 70% of the most expensive newly-built properties in London are purchased by non-UK citizens, and around 65% of these buyers intend to rent their properties rather than live in them, according to estate agency Knight Frank. The Office for National Statistics (ONS) said that house prices in London rose by nearly 9% in the year to August, compared with around 2% elsewhere in the UK.

Responding to the report, the British Property Federation said that the reason behind this increase was the lack of supply, not foreign buyers. Penalising people who wanted to invest in the UK would lead to fewer homes being built, as would the related uncertainty, its chief executive Liz Peace said.

"It makes no sense to slap kneejerk taxes on people who want to spend money in the UK and contribute to the UK economy," she said. "Uncertainty of this kind is hugely damaging to Britain's image as a country that is 'open for business', and far outweighs the paltry sums which this tax would raise – indeed, it is only with foreign investment that many London schemes are able to go ahead."

Property expert Suzanne Gill said that the introduction of CGT on these transactions would be "a real issue, administratively" for the tax authorities.

"An increase in stamp duty land tax (SDLT) would be less burdensome, and must be more likely: recent changes in rates have not affected the property market," she said.

"What does affect the market is uncertainty. An SDLT announcement can be quickly absorbed, but a period of consultation over CGT will have an impact - especially following on from the introduction of the annual tax on enveloped dwellings (ATED) earlier this year," she said.

ATED came into force on 1 April this year, and the first payments were due in October. It applies to company-owned residential properties valued at over £2 million, and is intended to ensure that people who purchase high value residential properties in the name of a company, partnership or other 'non-natural person' pay their fair share of tax. Dwellings purchased as part of a genuine property rental business, held for charitable purposes or run as a commercial business are exempt from the charge.

Article Source: http://www.out-law.com/en/articles/2013/november/treasury-considering-further-taxes-on-foreign-uk-property-owners-according-to-press-reports/

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New Sales Process Launched for Residential Leasehold Properties in the UK

This article by the Property Wire on October 10th, 2013 discusses the introduction of a new sales process welcomed by the British Property Federation.

The British Property Federation has welcomed the introduction of a new property sales process which will reduce leasehold transaction times by five to 10 days and save UK consumers a combined total of over a million days each year.
 
The new process, based on a standardised questionnaire for the industry has been created by the BPF and all the major trade bodies, including The Law Society and the Royal Institution of Chartered Surveyors (RICS), facilitated by Move with Us, and will be available to all parties in the process.

The BPF pointed out that buyers and sellers of leasehold properties have experienced added complications and expensive delays because of differing information requirements from both the buyer’s and seller’s conveyancers meaning the landlord or managing agent has to deal with a different set of enquiries every time a leasehold property is sold.

By creating an approved set of enquiries for leasehold properties both landlords and managing agents can introduce systems to collate the information safe in the knowledge that both the buyer’s and seller’s conveyancers will accept it, saving an estimated five to 10 working days on average. Consumers will also save money as the additional requests for information will only be required where an issue is revealed which requires further investigation.

‘It is great to see that the whole residential leasehold sector pulling together and delivering a benefit to its customers,’ said Ian Fletcher, director of policy at the British Property Federation.

‘The commercial leasehold sector has had standard enquiries for 10 years and seen the advantages flowing from a more efficient conveyancing process. The same will be true of these residential enquiries and we will be promoting them amongst our membership as the standard for the sector,’ he added.

The new industry created and approved Leasehold Property Enquiries, Form LPE1 will be available from 10 October and the overall concept has been approved by the Council of Mortgage Lenders (CML) and The Building Societies Association (BSA).

Landlords, managing agents and conveyancers interested in accessing the new leasehold enquiries form should contact Beth de Montjoie Rudolf at Move with Us.

Article Source: http://www.propertywire.com/news/europe/uk-leaeshold-property-sales-201310108334.html