Taylor Scott International News
New tax rules which come into force next month in the UK could leave some home owners with a bill of £7,000 if their property is partly or wholly owned by a company or partnership. The 2014 budget reduced the threshold for dwellings that fall within the Annual Tax for Enveloped Buildings (ATED), what used to be called the Annual Residential Property Tax, from £2 million to £1 million. The threshold will come down again in 2016 to £500,000 bringing thousands more properties throughout the UK into the tax bracket and forcing owners to submit an ATED return. Sue Crossley, from The Country House Company in Hampshire, which handles the sale and letting of high quality rural properties throughout the south, said many owners were unaware of the new tax burden. ‘This is going to be a shock for a lot of people. This change was tucked away in the small print of the 2014 budget but now it is actually coming true for a lot of people,’ she explained. Most residential properties are owned directly by individuals, but in some cases they may be owned by a company or a partnership with a corporate member. Then the dwelling is said to be ‘enveloped’ because the ownership sits within a corporate wrapper or envelope. Crossley pointed out that there are reliefs that could reduce the tax completely but they can only be claimed when a tax return is completed and sent in. There are also exemptions for charitable companies using the dwelling for charitable purposes. The returns are due by 01 October 2015 and payment by 31 October 2015. From April 2016, properties valued at greater than £500,000 but not more than £1 million will have an annual charge of £3,500. ‘Many people living in properties worth £1m who run businesses and use their property as an investment vehicle will find they have an extra bill to pay this year. That will have a direct impact on a significant number of people this year but many thousands more people will be affected next year when the threshold comes down again to £500,000. There are millions of people living in houses worth more than that,’ said Crossley. ‘I can see why the government has made this change. They have seen people in business use their property as a shield from some of their tax burden and the Exchequer has been looking for a way to claw some of this back. But the bill will still come as a shock to many who may not have been expecting it or may not have budgeted for it,’ she added. Taylor Scott International
Taylor Scott International, Taylor Scott
