HMRC collected £174m from the annual tax on enveloped dwellings (ATED) in 2015/16, up 50% from the £116m collected in 2014/15. This follows the lowering of the ATED threshold since 2013 from properties worth more than £2m, to those worth more than £1m in 2015/16 and, from 1 April 2016, to £500,000.
James Badcock, partner at private client law firm Collyer Bristow, commented: ‘The increase in ATED collected reflects the government’s continued attack on the ownership of UK property via corporate and offshore structures’.
When combined with the removal of IHT exemption for offshore companies from April 2017, increases in SDLT and the introduction of CGT for non-residents, this ‘could make UK residential property a much less attractive investment for overseas HNWs’, according to Collyer Bristow.
James Badcock said, ‘The government need to ensure that in targeting tax avoidance and seeking to take heat out of the central London property market they do not altogether deter foreigners from investing or spending time in the UK’. He added, ‘Many will now be looking at how they can ‘de-envelope’ their property. This process can involve substantial tax charges. It would be helpful if as part of its forthcoming consultation on the inheritance tax changes the government could consider reliefs against these – allowing individuals to move to the personal ownership which the government favours without prohibitive or punitive costs’.
HMRC collected £174m from the annual tax on enveloped dwellings (ATED) in 2015/16, up 50% from the £116m collected in 2014/15. This follows the lowering of the ATED threshold since 2013 from properties worth more than £2m, to those worth more than £1m in 2015/16 and, from 1 April 2016, to £500,000.
James Badcock, partner at private client law firm Collyer Bristow, commented: ‘The increase in ATED collected reflects the government’s continued attack on the ownership of UK property via corporate and offshore structures’.
When combined with the removal of IHT exemption for offshore companies from April 2017, increases in SDLT and the introduction of CGT for non-residents, this ‘could make UK residential property a much less attractive investment for overseas HNWs’, according to Collyer Bristow.
James Badcock said, ‘The government need to ensure that in targeting tax avoidance and seeking to take heat out of the central London property market they do not altogether deter foreigners from investing or spending time in the UK’. He added, ‘Many will now be looking at how they can ‘de-envelope’ their property. This process can involve substantial tax charges. It would be helpful if as part of its forthcoming consultation on the inheritance tax changes the government could consider reliefs against these – allowing individuals to move to the personal ownership which the government favours without prohibitive or punitive costs’.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")