Budget 2014 House Owned By Company Tax
Published / Last Updated on 24/03/2014
Budget 2014 House Owned By Company Tax
The Annual Tax on Enveloped Dwellings (ATED)
Residential properties owned by corporate structures pay a yearly tax. This is beacuse these structures are trying to avoid stamp duty and other taxes when selling property beacuse the ownership of the property never changes hands (the company still owns the property) - it is the shares in the company that are sold thise avoiding Stamp Duty Land Tax (SDLT). This government introduced the annual Tax on Enveloped Dwellings (ATED) to penalise this.
The current levels of tax are:Rates for chargeable period 1 April 2013 to 31 March 2014
Property Value | Annual Tax 2013-14 |
|---|---|
Over £2 million to £5 million | £15,000 |
Over £5 million to £10 million | £35,000 |
Over £10 million to £20 million | £70,000 |
Over £20 million | £140,000 |
More properties will be caught
The budget 2014 is dramatically changing this to introduce two new tiers over the next year or so:
1st April 2015 - Properties valued at £1,000,000 plus will be subject to ATED at £7,000
1st April 2016 - Properties valued at £500,000 plus will be subject to ATED at £3,500
Stamp Duty Extension
In addition to the above, any 'non-natural person' i.e. a company or a trust buying higher value properties pays stamp duty at a higher rate of 15%.
This will be extended to all properties bought that are valued at £500,000 plus.
IN addition, higher capital gains tax penalties will apply when residential properties inside ATED's are sold.
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