The 2014 Autumn Statement announced that property disposals by non UK tax residents would be liable to capital gains tax with effect from 6th April 2015.

While the main residence relief which most UK individuals enjoy exempting their homes from Capital Gains Tax (“CGT”) would still be available but only if certain conditions are met.

The changes are targeted at non UK resident individuals who purchase property in the UK but only spend a few weeks or months in the UK and then sell the properties with no or little CGT.

The rules also apply to Expats who have retired abroad or become non-resident for any other reason (such as going abroad to work) and have still retained property in the UK.

The rules do not make any allowance for the amount assets held by an individual or the reason for sale, and therefore if an individual who has contributed to the UK economy retires abroad and subsequently is forced to sell his UK property, as of 1 April 2015 UK CGT will be payable.

The rules impact on property that has been adapted for residential use rather than commercial property, and includes residential property acquired and let on a commercial basis, such as buy to lets.

The legislation is part of HMRC’s wider strategy to try and tax wealthy foreign individuals who buy homes in the UK as status symbols and spend only a few weeks or months a year in the UK for social reasons and then dispose of the property tax free.

Other measures include the 15% SDLT rate on residential properties acquired through companies, the Annual Tax on Enveloped Dwellings, which applies an annual tax on these types of properties and charging the full rate of CGT, 28%, on their sale.

However the unfortunate consequence for Expats means that they will generally be caught under change to the CGT rules on main residences rules and should seek specific tax advice from their UK tax advisers.

With the election on Thursday, the above new rules may be subject to any changes in the colour of the Government.

- Alastair Byrne, Tax partner at JWP Creers