Finance Bill 2016: Clauses 117-122 - SDLT
We are concerned that the interaction between the CGT charge on disposals of residential property interests by non-residents introduced by Finance Act 2015 and the ATED-related CGT provisions for non-resident companies gives rise to calculations of disproportionate complexity. Although ATED-related CGT was introduced with a different policy intent (that of preventing avoidance of SDLT through ‚ enveloping‚ , rather than achieving parity of CGT treatment between residents and non-residents) the retention of the ATED-related CGT regime operating in tandem with the CGT charge on non-residents means that a single disposal of a property may fall within both regimes, depending on the use of a property from time to time. It is this interaction that leads to this complexity.
In our response to the consultation on ‚ Implementing a capital gains tax charge on non-residents‚ in June 2014, the CIOT said:
‚ ‚ a gain arising on the disposal of UK residential property by a non-resident company potentially may fall within the scope of the proposed new CGT charge from 2015, ATED-related CGT from 2013-2015 (assuming that ATED related CGT is abolished from April 2015) and trigger the imputation provisions (TCGA 1992 sections 13, 86 and 87) in relation to gains accruing before 2013.
‚ The most effective method of importing simplicity into the CGT regime governing the taxation of non-residents owning UK residential property is for ATED-related CGT to be abolished altogether from April 2015. As a result, all acquisitions of UK residential property post April 2015 (the current proposed date for the introduction of the proposed new CGT charge) would be governed by the proposed new charge.‚