The annual tax on enveloped dwellings (ATED) applies where a residential property located in the UK is owned by a non-natural person such as; a company, partnership with a corporate member or a collective investment scheme. There are a large number of reliefs and exemptions from the charge, but where such a relief does not apply the ATED charge must be paid by 30 April within the year at the following rates:
From 1 April 2015 the ATED charge is to be extended to properties with value of £1m to £2m. Then from 1 April 2016 the ATED charge will be extended to properties worth £500,001 to £1 million. The 15% rate of Stamp Duty Land Tax on such properties worth over £500,000 comes into effect from 20 March 2014 – see below.
Capital Gains Tax
The rates and annual exemption for capital gains tax are as follows:
Capital gains tax basic rules:
- A transfer between spouses or civil partners is tax-free (made on a no gain/no loss basis).
- A gift made between connected persons is treated as being made at market value.
- When a disposal attracts another form of tax, such as inheritance tax or income tax, credit is generally given so there is no double charge.
- The indexation allowance no longer applies to individuals.
- An income tax trade loss may be offset against capital gains.
- Capital gains may be deferred by reinvestment.
- Non-UK residents are not taxed on gains made on UK situs assets (other than residential property), providing that they remain non-resident for a qualifying time period.