The government has issued a consultation document on implementing a capital gains tax charge on non-residents disposing of UK property. 

The charge is to take effect from April 2015. The initial consultation period has closed and the government is considering the representations made. Many questions remain to be answered:

• will principal private residence relief be available?
• how will principal private residence be established?
• will the election for principal private residence be abolished?
• will the conveyancing solicitor be responsible for paying over the tax?
• how will the taxpayers be identified?
• legislation must ensure that EU taxpayers are not disadvantaged.
• what will the tax rate be and will the annual exemption be available?
• how will the gain be measured; will the value be re-based as at 5 April 2015?
• how is a dwelling to be defined?
• with the new charge on non-resident trustees, how will the CGT trust regime be affected?
• where ATED and the new CGT charge apply, which will take precedence?
• will this legislation discourage foreign investment?

Non-UK residents have largely escaped capital gains tax, so a UK resident person disposing of UK property (other than a main residence) would have a charge to CGT, whereas a non-UK resident disposing of a similar property would not.

The charge would not apply to commercial property unless it is converted to a dwelling; it applies only to dwellings, or properties capable of being used as dwellings. It would sit side by side with ATED (annual tax on enveloped dwellings), but the interaction between the two charges is not yet known.