High-value residential property tax attack

In less than a month, two tax changes are coming into effect that are intended to make owning high-value residential property through companies less attractive. Although we do not yet have the final form of the legislation, the basic shape of the new rules is clear enough and serious consideration should now be given to unwinding these structures.

Last year saw the introduction of a 15 per cent rate of Stamp Duty Land Tax on companies acquiring residential property worth more than £2 million. Now these companies will also have to stump up an annual charge – the Annual Residential Property Tax (ARPT). This will be between £15,000 and £140,000 depending upon how much over £2 million the property is worth. There will then be a special capital gains tax (CGT) charge of 28 per cent on the sale of such properties but limited to the post-5 April 2013 gain…

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