Well what a surprise! The Inland Revenue looks set to target people with holiday homes abroad with a new tax - even if they do not rent it out and just use it themselves.
Many people have bought holiday homes through special arrangements e.g. by setting up an offshore company and the company then buying the property.
Our view
This approach, common for Spanish properties particularly, has been used to avoid local tax and inheritance tax laws.
In Spain, for example, as well as being taxed yearly on the growth in the value of your property by up to 30% if you are a non-resident, you also pay "wealth taxes" when you sell. The cost to buy or sell a property can be as much as 20% to 30% of the total purchase price in tax and legal fees.
It is much easier and cheaper to sell shares in a company! It looks like yet another great idea will get caught!
Free Factsheets - on Capital Gains Tax and Second Properties and Offshore Investment.