British property tax system now the most ‘complex’ in the world, says PwC
Analysts at the accountancy firm found that the UK system was even more intricate than the equivalent structure in France
The British property tax system is now the most “complex” in the world, endangering London’s reputation as an investment haven, according to new analysis from accountancy firm PwC.
Research showed that London has a more complicated property tax regime – thanks to the introduction of multiple layers to capital gains tax – than rival real estate investment hubs New York, Moscow, Sydney and Berlin.
Analysts at the accountancy firm found that the UK system was even more intricate than the equivalent structure in France, despite the punitive levies placed upon wealthy home-owners in Paris, under the leadership of President François Hollande.
The new layers of capital gains tax that have been introduced – such as the 2013 Annual Taxation of Enveloped Dwellings (ATED) – are a deterrent to domestic and overseas investors, according to Paul Emery, a tax partner at PwC.
On top of this, from April 2015, all non-UK resident individuals and companies have been brought into the scope of ATED regardless of whether the property is being occupied by a related person.
Amid a wave of anti-tax avoidance measures introduced by Chancellor George Osborne another rigour was imposed in the form of an income tax (which can be up to 45pc) on the sale of a home, bought under a company umbrella for the pure purpose of flipping it to make profit.
“There are now four regimes dealing with capital gains tax on residential property for both domestic homeowners and overseas investors, who do not understand the regime without seeking advice,” said Mr Emery.
“It has become an impenetrable system, but if you simplify it then people will be more compliant.”