PEOPLE living outside the UK and investing in British property do not pay enough tax, deputy prime minister Nick Clegg said yesterday, hinting at a crack down on overseas cash in next month’s Autumn Statement.
House prices in London are rising at around 10 per cent a year. While most buyers across the market are UK-based, Asian and European buyers of prime property have been blamed by some politicians for pushing up prices.
UK residents pay capital gains tax – typically at 28 per cent – on any profit from selling property that is not considered their primary residence. Foreign-based property investors often pay tax where they live, but it is sometimes at a lower rate, and in some countries such investments are exempt.
Clegg said the government is reviewing the matter before George Osborne updates parliament on his fiscal plans on 5 December, but said no decision had been taken.
“We certainly need to make sure that people who invest very large amounts of money into property in central London locations pay their fair share of tax in those transactions,” said Clegg.
“That is why we are looking at options like a differential application of capital gains tax to those kind of transactions.”
Clegg also warned that the UK economy should stay open, though.
City A.M. Reporter