We have not seen the economic downturn predicted immediately after the Brexit decision but the pound lost significant value following the referendum result on 24 June 2016. Whilst the currency markets have been predicting further reductions in value of sterling before it begins to stabilise, recently the pound has started to regain some value – perhaps because there was an overreaction or because the US dollar is reflecting its own weakness ahead of the upcoming American elections.
So far the UK has not triggered Article 50 to begin the negotiations to set our exit terms from the EU – so there must inevitably be a continuing period of uncertainty.
In the property market there are price reductions especially at the top end of the market, but there is also evidence at the lower and middle end that a lack of supply of homes is helping to maintain values.
As expected, the Government still intends to bring residential property held in an offshore structure by non doms within the scope of Inheritance tax. This will apply with effect from 6 April 2017 and the Government’s latest consultation paper published last month is available at:- https://www.gov.uk/government/consultations/reforms-to-the-taxation-of-non-domiciles-further-consultation/reforms-to-the-taxation-of-non-domiciles-further-consultation
It is worth noting that commercial property is not caught by these proposals. Similarly only residential property was targeted when Capital Gains Tax for non-residents became payable for the first in April 2015.
The stock market appears to be reasonably sound – anecdotally helped by the lower pound. Everyone should be back from their summer holidays now and it will be interesting to see if the value of sterling and softer prices help kick start the market.
This information is published for general information and should not be relied upon without legal or other professional advice.