Done & Dusted
The much talked about UK election is now well and truly behind us, how can the opinion polls have been so wrong you may be asking yourself, it had most investors worried about a hung parliament or even a Labour victory which we were led to believe would send the markets crashing down around us.
Well now you can let out a sigh of relief, or can you, the result was taken well by the UK equity markets and in the short term should provide businesses with a stable political and legislative background in which to invest for the future.
However it is debatable as to whether the UK election results will have any impact on interest rates, the Bank of England voted last week to keep the base rate at 0.50%. Official figures at the end of the last month showed the total size of the economy increased by just 0.3 per cent in the first quarter of 2015. That was half the 0.6 per cent growth rate seen in the previous quarter and the worst performance since late 2012 – raising fears that the recovery is running out of steam.
No More Tax Exemptions
Hands up if you still own a property in the UK, but have residential status in Tenerife, or indeed anywhere else in the world?
If you’re one of the many thousands of expats, who decided to keep a foothold in the UK property market, ´just in case´, then potentially, you may well be out of pocket when you decide it´s time to sell. This is yet another one of the latest steps in a series of significant changes affecting the taxation of UK residential property in recent years. Up until the 6th of April 2015, non-UK residents have always enjoyed being exempt from Capital Gains Tax (CGT) on private residences, and also had the right to claim Private Resident Relief... regrettably for many, this is no longer an option - the rules have now changed! Capital Gains Tax (CGT) has been extended to non-UK residents with effect from the 6th of April this year.
Yet again what another country does or doesn’t do could have huge implications of the rest of Europe and the Western world.
The clock is ticking for the Greek government to pay back the International Monetary Fund over €1bn (£720m) in loans in early May, as well as fund €1.4bn Treasury bill redemptions, and other major payments, including coupon payments on Greek government bonds.
It would appear that the Greek finance minister Yanis Varoufakis has been sidelined in Greek debt negotiation talks, but as Holly Cook from Morningstar says “The situation hasn't changed that much, no matter who is actually doing the talking, they can't stray too far from what their original mantra was, because their original mantra was all about anti-austerity... They've got a relatively tight margin for maneuver."
More Taxing Times Ahead
From April 6th this year, individuals who do not spend sufficient time in the UK, or have insufficient ties with the UK to be resident there for tax purposes but who nonetheless own a home in the UK, may now need to pay capital gains tax (CGT) on any gains arising on the eventual sale of the property.
How will the tax work?
Only gains made from 6th April 2015 are taxable in calculating the gain on the property disposal i.e. non-UK resident property owners will substitute the value of the property as at 6th April 2015 for its actual acquisition cost, thereby rebasing the value to its market value as at that date. Alternatively, property owners may elect to calculate the gain by using the actual acquisition cost but paying tax only on the time-apportioned post-5th April 2015 part of the gain.
If the non-resident usually files a UK self assessment tax return any gain must be included in the appropriate year's return, otherwise any tax must be paid within 30 days of completion. Non-residents will continue to be exempt from CGT on disposals of commercial property and other assets.