Whilst this is UK legislation there are a number of announcements that will affect expats, as well as non-residents who own UK assets, so this article will clarify those issues rather than going through the whole statement. The full document as issued in the first week of December 2013 is some 130 pages long and not the most interesting thing to read!
The pertinent points for non-residents are as follows:
Increase in state pension age
The date when the UK state pension age rises to 68 will be brought forward to the mid-2030s. It had not been due to increase to this until 2046 and the age could rise to 69 by the late 2040s. This means that people who are now in their forties will not get the state pension until they are 68, while those in their thirties will have to wait until they are 69.
Earn more in the UK before being taxed
The personal allowance is to increase to £10,000 per person from April 2014. This means that means that anyone can receive income arising in the UK of this amount before any tax is due. This applies to rental income so could reduce the tax liabilities for some people.
Loss of Capital Gains Tax exemption on sale of assets & property
The big concern for many expats, as well as non-residents who own property in the UK, is the removal of the Capital Gains Tax exemption on any property or other assets sold by someone who has not been UK resident for tax purposes in the previous five tax years. It is understood that the removal of the exemption is designed to target overseas investors, but expats will be caught too.
The annual allowance remains in place, but after 2015 any property that is not a main residence of someone who is UK resident for tax purposes will be subject to Capital Gains Tax on the profit. This starts at 18% and increases to 28% for higher rate tax payers.
The specifics are as yet unknown, with a consultation period to start next year, but anyone who is thinking of selling assets in the next few years may wish to do so sooner rather than later, but it will be interesting to see if there is a flood of properties on to the market which could reduce prices.
For further information on how these changes could affect you or queries on any other financial planning issues, please contact me on: firstname.lastname@example.org