Tax Changes on Property Holdings

2nd July 2015 Posted by golet

It is being advised that Landlords should take time to review their rented housing stock, in light of newly implemented and forthcoming changes to UK property taxes. The two changes outlined below will apply to many Landlords.

Annual Tax on Enveloped Dwellings (ATED)
This tax is only admissible for UK residential properties, 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.

Since April 2015 ATED was only relevant to properties worth over £1 million, but from 1st April 2016 this will be applied to all properties worth £500,000 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 investment property sales, at a current top rate of 28%.

Those living abroad were able to sell their UK properties without incurring any tax.

From 6th April this year non residents will also have to pay Capital Gains Tax (CGT) when selling their UK investment properties, irrespective of whether they are individuals, trust, partnerships etc.