Legal experts outline effects of UK tax rates on home worth over £2 million

Legal experts outline effects of UK tax rates on home worth over £2 million - 2014-06-21


Homes around the £2 million mark in the UK are likely to disappear from the market due to measures that aim to discourage ownership of high value property by companies, often regarded as a means of tax avoidance, according to legal experts.
Legal experts outline effects of UK tax rates on home worth over £2 million


 















The UK government has published its consultation on measures designed to discourage ownership of high value property by any means other than outright by individuals, a move that was announced in the March 2012 Budget and follows the enactment of enhanced Stamp Duty rates for high value residential property. The consultation adds further flesh to the Governments proposals but still leaves many important questions unanswered, according to law firm Boodle Hatfield. 



 



The new 15% rate of Stamp Duty took effect from 21 March 2012 on the purchase of residential property worth more than ?2million by a non natural person, that is companies, collective investment schemes and partnerships with a corporate partner. Whilst the 15% rate makes purchasing a home through a company less attractive, it still allows Stamp Duty to be avoided by acquiring shares in a company which already owns the property. 



The government therefore intends to introduce further measures to explicitly discourage the enveloping of relevant properties in companies and other vehicles. The consultation provides details of the annual charge of between 15,000 and ã140,000 which is to be introduced from 01 April 2013 on homes valued at more than 2 million that are held by non-natural persons. 



Trustees will be relieved to see that trusts owning residential property will not be subject to this annual charge, said Stephen Green, a solicitor in Boodle Hatfield?s Private Client and Tax team. The consultation also extends the scope of Capital Gains Tax (CGT) to the disposal of high value UK residential property by non-resident non natural persons where the property is sold for more than 2 million. 



The CGT charge applies more broadly than the annual charge or the 15% SDLT rate and will be payable by trustees, personal representatives, clubs, associations as well as companies and collective investment vehicles, explained Green. ?It is not clear, however, how the extended CGT charge will fit in with the current rules that tax gains of offshore trusts on UK resident beneficiaries. It is also unclear whether the normal CGT rates will apply or whether a new penal rate will be introduced, he pointed out. 



These proposals will have significant consequences for those purchasing or owning property around the 2 million cliff edge. It would not be at all surprising to see homes around the ã2 million mark disappear from the market as the costs of acquisition and ownership soar, he added. the name The Villa by Barton G. 



ニュースページに戻る
     

 Email: **

 要求内容

  *