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Company-owned high value homes - new taxes now in force

View profile for Matthew Fretten
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The Government’s new annual tax on residential properties valued at more than £2 million that are held by companies or ‘non-natural persons’ came into force on 1st April. From April 6th whether or not an individual is resident in the UK for tax purposes, will be determined by a new statutory test.

Matthew Fretten, Commercial Partner, says “The ‘annual tax on enveloped dwellings’ (ATED) to be charged every year on residential properties valued between £2 – £5 million that are held by by a ‘non-natural person’ – ie- a company, will be £15,000.” For the most expensive properties worth more than £20 million the charge will be £140,000 annually. In addition to the ATED, from 6th April ‘non-natural persons’ will be subject to capital gains tax at 28% in respect of gains accruing on the sale of high value residential property that are subject to the ATED. UK companies will also be liable to this charge in respect of such disposals rather than corporation tax.

The new statutory residence test is designed to give greater clarity as to whether or not individuals are UK resident for tax purposes and therefore subject to UK income tax and capital gains tax. The test will distinguish between ‘arivers’ and ‘leavers’. Arrivers are people who have not been resident in the UK for any of the previous three tax years. Leavers are those who have been. Both arrivers and leavers must use different measures to establish their residence status.

For a free initial meeting please call 01202 499255 and Matthew or a member of his team will be happy to discuss any questions you may have.