Foreign investment in UK residential real estate

Over the past five years, the UK housing market has been closely monitored by the media and the wider political spectrum. The response of recent governments to these developments has been to put in place a plethora of measures. Now, first-rate real estate is subject to higher taxes, especially in cases where the property is owned by a corporation. The exemptions enjoyed by foreign investors were phased out and a tax break was introduced for individuals buying a first home.

At the time of buying: Real Estate Transfer Rights (SDLT)

SDLTs are property located in England and Northern Ireland. Scotland and Wales have introduced their own transfer duties, which are similar but not identical to the SDLTs.
The SDLTs are to be paid by the purchaser on the amount of the purchase price. For residential property valued at more than GBP 1.5 million, these fees represent a substantial upfront fee that can not usually be reduced.
It is important to distinguish between the purchase of the first (principal) residence of a natural person and the purchase of a new property.

The purchase of property that is a first purchase or the sole principal residence of the owner (worldwide) and that is not acquired through a corporation is subject to the SDLT rates in the middle column of the table below. -Dessous. Buyers acquiring for the first time goods worth less than or equal to £ 500,000 benefit from a partial exemption and a reduced rate of 5% SDLT.
For the purchase of a second property or subsequent properties, the “Additional SDLT” rates are applied. These rates add 3% to each slice (right column of the table below).

Upon transfer or donation – Taxation of Plus-Values ​​(CGT)

The CGT is applied to all foreign owners of residential property in the UK, whether the property is held individually or through a trust or company. It is calculated by reference to the increase in the value of the good (the “Plus-Value”). In cases where the property is not the property of a company and was acquired before April 6, 2015, it will be calculated on the basis of its value as at April 5, 2015, so that prior gains are not recognized. not charged against the sale.

The CGT rates are as follows: 18% or 28% for natural persons (based on total British income and capital gains), 28% for trustees and 20% for companies. In cases where a company is subject to the ATED (referred to above), the highest rate of 28% is applied.

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