18th
May 2015
Landlords and lettings agents need to be fully aware of the impending changes to two areas of tax on property holdings. These are ATED (Annual Tax on Enveloped Dwellings) and CGT (Capital Gains Tax) for non resident landlords.
It is being advised that landlords will need to take time over reviewing their rented housing stock before the property tax changes are implemented.
Annual Tax on Enveloped Dwellings (ATED)
This is when UK residential properties are owned by a company, a partnership with a corporate partner or a collective investment scheme. ATED which was originally the Annual Residential Property Tax, is a yearly charge on UK residential property.
Since April 2015 ATED it was only pertinent to properties worth over £1 million, but all parties must be aware that from 1 April 2016 this will be applied to all properties worth £500,000 and up to £999,999. The annual charge under ATED for this new band will be £3,500.
Capital Gains Tax
Before April 2015 British landlords living in the UK had to pay Capital Gains Tax (CGT) on UK property at a current top rate of 28% tax on investment properties. Those living abroad were able to sell their UK properties without incurring any tax.
From 6th April this year, it has now changed for non residents as they will have to pay Capital Gains Tax when selling their UK properties, irrespective of whether they are individuals, trust, partnerships etc.
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