Categories:Real Estate,Tax,UK

UK real-estate tax update: extension of the ATED and capital gains tax for non-UK residents

The Annual Tax on Enveloped Dwellings (ATED) is an annual charge to UK tax of up to £143,750 on UK residential property worth £2m or more, which is held by certain non-natural persons (NNPs). It applies (broadly) where the property is used by an individual connected with the owner rather than being rented out to a third party. Where the NNP has been subject to the ATED on a property, it is also subject to the ‘ATED-related’ UK capital gains tax charge on a disposal of that property.

The ATED is to be extended to properties of lower values, so that as of 1 April 2015 residential properties owned by NNPs worth £1m–£2m will be subject to the ATED, and from 1 April 2016 this will be further extended to properties in the £500,000–£1m price bracket.

Capital gains tax will also apply to disposals of these properties from 6 April 2015 for properties worth £1m–£2m and from 6 April 2016 for properties worth more than £500,000…

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