Tax change hits foreign buyers

The FT reports that a “little-noticed” tax change introduced in early August has added to the recent slowdown in sales of luxury London homes to foreign buyers. Non-domiciled residents must now pay tax of up to 45% when they use overseas assets as collateral to finance purchases in Britain, whereas previously, foreign assets such as stocks, shares and property could be used as security for borrowings in Britain with no tax charge. The move is being viewed as the latest in a series of government efforts to clamp down on foreign buyers. It comes after George Osborne announced plans in 2012 to impose CGT on expensive properties owned through companies, and after the government also imposed an annual tax on homes held in companies, which has raised £198m in 10 months according to HMRC figures.