George Osborne 'considers capital gains tax for overseas buyers'
Sky News says the chancellor may impose CGT, currently only paid by UK citizens, on foreign buyers selling UK property
This is something I have long argued for, suggesting on the way that the mechanism to tackle this issue is to simply require that tax at the CGT rate be withheld by a purchaser if they cannot prove that the vendor is UK resident with it then being for the person suffering withholding to prove their tax position and to claim any refund owing. Nothing will motivate compliance more strongly than a desire to get hold of withheld cash. In other words, this problem can be solved.
But let's also be clear that this is not the only problem needing addressing. The problem of foreign companies owning land in the UK and avoiding tax on gains on it needs to be addressed. This is commonplace. And the problem that foreign companies owning land and renting it in the UK are, quite absurdly, not considered tax resident in the UK and are not required to file accounts or pay corporation tax here (but are subject to the inadequate and ill enforced arrangements on income tax that apply to overseas landlords) should also be tackled.
So, a comprehensive package of reform is needed that:
1) Says all gains on UK property are subject to UK tax with tax withholding always in force until it can be proven that the vendor is UK tax resident and HMRC know of the transaction (so yes, notification must be given);
2) Requires all non-UK resident companies owning land to be deemed resident in the UK and requires them to file accounts and corporation tax returns in this country or risk forfeiture of that property (an effective sanction);
3) Requires that anyone seeking to subvert these rules must be subject to significant penalties, because you can be sure it will happen.
Then we might create a level playing field in UK property taxation. But right now we are a long way from that and the UK is not open for business when it comes to property taxation but is instead open to abuse.