FOREIGN INVESTORS buying up luxury London properties could be hit with new taxes, the deputy prime minister has warned.
As the Autumn Statement approaches on 5 December, Nick Clegg (pictured) said measures could be put in place to address London’s price bubble, adding the government’s failure to bring in a ‘mansion tax’ was the result of Conservative “prejudice”.
Clegg confirmed the government is considering introducing new council tax bands and hitting foreign real estate owners with a capital gains tax, the Standard reports.
Foreigners selling second homes in the UK could face a 28% capital gains tax on the sale, he said.
He said there are “parts of the London property market now which are entirely divorced from and dislocated from the rest of the economy – certainly London’s economy and even more from the rest of the nation’s economy”.
He added: “We have a significant amount of property taxes, but – for reasons of history and accident and, frankly, downright prejudice on the part of my Conservative colleagues who simply don’t want to ask people in very high-value properties to pay a bit extra – we are saying to hard-pressed families `you have to pay a property tax but someone in a multi-million pound mansion down the road doesn’t’. That strikes me as unfair and I think it strikes most British people as unfair. Why should a family in Lewisham pay the same council tax as someone in a vast palace worth several million pounds?”
It is thought the Liberal Democrats will include in their manifesto for the 2015 general election that the income tax threshold will be raised so anyone on the national minimum wage – currently around £12,500 – would be removed from tax altogether.
He said: “I very much hope it is something we can achieve, because as the recovery takes hold I think it is important that we in government should do all we can to make sure that the largest number of people benefit from that recovery.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward