ATED receipts up 53%…

ATED receipts up 53%…

Back to Newsletters

Recently released statistics have revealed a 53% increase in the tax obtained from payments of the Annual Tax on Enveloped Dwellings (“ATED”). It is thought that this is largely because the property value threshold for properties that are subject to the ATED charge was further reduced from the £2m (the threshold when the ATED was first introduced in 2013) to £500,000 from 1 April 2016.

UK residential properties owned by non-doms via overseas companies have always provided an effective shelter from Inheritance Tax (“IHT”) in the UK. Probably for this reason, few properties appear to have been removed from corporate ownership to date as the ATED may have been a price worth paying to secure protection from IHT. However, from 6 April 2017 IHT protection will be lost by these structures and as a result many taxpayers are now looking at de-enveloping. Careful consideration and advice must be taken before de-enveloping as significant capital gains tax and stamp duty land tax charges can be incurred. Directors, trustees and individuals need to make their decision on a cost benefit basis, compare the impending IHT exposure to the cost of de-enveloping in the context of their longer term plans and objectives.

If these changes impact you and you would like to discuss your options with a member of our team then please contact us.

Subscribe to our newsletter

Keep up to date with the latest tax news.