The media coverage of the Budget has focused on the stamp duty exemption for first time buyers but away from the headlines, the announcement that will cause most concern for the property industry is the Chancellor’s decision to tax the gains made by non-UK residents on UK commercial property from April 2019.
The general position is that the UK does not currently charge a tax on gains made by non-UK investors when they dispose of UK commercial property. The Government proposals are that any gains made after April 2019 disposals made by individuals will be subject to capital gains tax (currently 20% for non-residential property) and disposals by non-UK entities will be subject to corporation tax (currently 19%, dropping to 17% in April 2020).
With Brexit set for 29 March 2019, the UK will be focusing on stimulating business internationally. To introduce a tax on gains made by non-UK property investors just days later, will do little to endear us to our future worldwide trading partners.