As previously announced, it has been proposed that from 6 April 2015 capital gains tax will be charged on non-residents who make disposals of UK residential properties. HMRC have issued a consultation document to consider how the charge can be implemented and the tax collected.
Part of the proposal may also affect UK residents who own more than one residential property. Currently, where a taxpayer has more than one residence, it is possible to elect which of those properties is to be treated as their principal residence so that private residence relief (PRR) will apply to the gain on the elected property. To prevent non-UK residents from electing their UK residence as their PRR, it is proposed that the current election system is removed and replaced with the requirement that the taxpayer demonstrates the main residence they have occupied during the year. If implemented, this proposal could have a serious impact on a number of individuals, such as MPs and others who keep a flat in London which is occupied during the working week and another residence in the country for the weekend and where the rest of the family live during the week.