People who own more than one home could be affected by Treasury plans to overhaul capital gains tax on the profits from a property sale, it has emerged.

Those who have more than one home can currently choose which one they want to qualify for principal private residence relief (PRR).

PRR exempts people from having to pay capital gains tax (CGT) on a main residence when it is sold.

But the Government is worried that non-UK residents can nominate a British property for PRR even if they don't live there.

The changes to how properties can be nominated for PRR could affect UK and non-resident property owners from next April.

Deloitte tax director Patricia Mock said she was surprised that UK residents were also being affected, adding that the tax would be "wide-reaching".

The Government is proposing that instead of letting people nominate a property for relief, a decision on which home PRR applies to should be based on where people's mail is sent and where they are registered on the electoral roll.

Another option being looked at is to introduce fixed rules to identify which property is someone's main residence, one of which could be based on where they have spent the most time during the tax year.

The plans, which have been put out for consultation, also seek to charge non-UK residents the same CGT rates as residents when they are selling property.

Stephanie McMahon, Head of Research at Strutt & Parker, comments: “We have seen historically that these types of consultation add uncertainty to the market and we look forward to the clarification of the new legislation where buyers are able to make decisions with all of the facts rather than possibilities.”

David Gauke, the exchequer secretary to the Treasury, said the Government did not feel it was right that UK residents selling a second home should pay CGT when non-residents didn't.

The Government also wants to subject the profits on homes owned through offshore companies to CGT at their point of sale.

In his Budget Chancellor George Osborne extended annual tax on properties owned through offshore firms to those valued at over £500,000. It previously covered homes worth more than £2 million.