Super-wealthy property buyers who have purchased UK property worth £2m through company or other vehicles, are to be stung with an annual tax charge of up to £140,000.
HMRC this week has released its draft proposal for the new tax, aimed at stamping out Stamp Duty avoidance.
The new Annual Tax on Enveloped Dwellings is aimed at “non-natural persons” who have bought residential property at £2m-plus. The taxman defines “non-natural persons” as companies, certain collective investment schemes, and partnerships.
They will now have to complete an annual ATED tax return, and can expect to pay a yearly tax bill of between £15,000 and £140,000 depending on the value of the property.
The tax will fall due as from April 1 this year and will catch those purchasers who have specifically used a vehicle such as a company or partnership to avoid Stamp Duty. Tax returns must be filed by October 1 this year.
Tax advisory firm Baker Tilly has warned that some of those affected could find ‘de-enveloping’ an expensive process, and that the original structure might still be beneficial. It also says that “copious details” of the property and its valuation are required.
Comments
Stop scare mongering, SDLT does not apply to all properties, so why would this. Sealed bids have returnind to the London market and it needs cooling. This is one way of doing this that does not hurt the majority of the population.
Dangerous territory. Once the principle of an annual charge is established, it may (and probably will) be applied to all properties. Sofly softly.