Tax on £2m plus residential properties - Revision history

Designing Buildings at 07:38, 9 December 2020

2020-12-09T07:38:33Z

← Older revision		Revision as of 07:38, 9 December 2020
Line 89:		Line 89:
	* Residential research papers Dec 2012 by Knight Frank.		* Residential research papers Dec 2012 by Knight Frank.

−	[[Category:Property_law]] [[Category:Taxation]]	+	[[Category:DCN_Policy]] [[Category:Property_law]] [[Category:Taxation]]

Designing Buildings at 10:53, 15 March 2020

2020-03-15T10:53:51Z

← Older revision		Revision as of 10:53, 15 March 2020
Line 1:		Line 1:
−
	= Legislation =		= Legislation =

−	On ~~11<sup>th</sup>~~ December 2012 the draft Finance Bill 2013 was published. This proposes new taxes for residential property valued on April ~~1<sup>st</sup>~~ 2013 to be over £2m. It affects Stamp Duty Land Tax (SDLT), Capital Gains Tax and introduces a new Annual Residential Property Tax (ARPT). The objective of this legislation has been to persuade owners of £2m+ residential properties to stop using company wrappers, especially off shore companies to reduce or avoid tax liability.	+	On 11th December 2012 the draft Finance Bill 2013 was published. This proposes new taxes for residential property valued on April 1st 2013 to be over £2m. It affects Stamp Duty Land Tax (SDLT), Capital Gains Tax and introduces a new Annual Residential Property Tax (ARPT). The objective of this legislation has been to persuade owners of £2m+ residential properties to stop using company wrappers, especially off shore companies to reduce or avoid tax liability.

	= Stamp duty =		= Stamp duty =

	The new Stamp Duty rates based on the purchase/lease premium or transfer value of £2m plus residential property will be:		The new Stamp Duty rates based on the purchase/lease premium or transfer value of £2m plus residential property will be:
−	*7% for private purchases by individuals.	+
−	*15% for purchases by “non natural persons”. This includes companies, partnerships, and collective investment schemes.	+	* 7% for private purchases by individuals.
		+	* 15% for purchases by “non natural persons”. This includes companies, partnerships, and collective investment schemes.

	Exemptions to the 15% rate (i.e. reduction to 7%) will apply to:		Exemptions to the 15% rate (i.e. reduction to 7%) will apply to:
−	*Properties held for property development trading.	+
−	*Properties acquired and held for commercially renting to third parties.	+	* Properties held for property development trading.
−	*Properties used for trading purposes which are opened to the public for at least 28 days a year.	+	* Properties acquired and held for commercially renting to third parties.
−	*Properties held by registered charities.	+	* Properties used for trading purposes which are opened to the public for at least 28 days a year.
−	*Company property used to provide employee accommodation.	+	* Properties held by registered charities.
−	*Farmhouses occupied by working farmers.	+	* Company property used to provide employee accommodation.
−	*Some specified diplomatic or publicly owned premises.	+	* Farmhouses occupied by working farmers.
		+	* Some specified diplomatic or publicly owned premises.

	Apart from farmhouses and publicly owned premises, the above relief is conditional that no person connected with the owner of the dwelling occupies it beyond three years from the purchase date.		Apart from farmhouses and publicly owned premises, the above relief is conditional that no person connected with the owner of the dwelling occupies it beyond three years from the purchase date.
Line 23:		Line 24:
	The following is a summary of proposed and existing SDLT rates:		The following is a summary of proposed and existing SDLT rates:

−	{\| ~~cellspacing="1" cellpadding="1" border="1"~~	+	{\|
−	\|-	+
	\| Value up to £125,000		\| Value up to £125,000
	\| Zero rated		\| Zero rated
Line 49:		Line 49:
	= Annual residential property tax (ARPT) =		= Annual residential property tax (ARPT) =

−	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at ~~1<sup>st</sup>~~ April 2013.	+	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1st April 2013.

	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service is due to be up and running by June 2013 and will be provided free of charge.		Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service is due to be up and running by June 2013 and will be provided free of charge.

−	The first ARPT tax return will be due on ~~1<sup>st</sup>~~ October 2013 with payment due not later than ~~31<sup>st</sup>~~ October 2013. This will then revert to an annual deadline from ~~30<sup>th</sup>~~ April 2014 onwards.	+	The first ARPT tax return will be due on 1st October 2013 with payment due not later than 31st October 2013. This will then revert to an annual deadline from 30th April 2014 onwards.

	The proposed ARPT annual charges set for five years commencing 2013 are shown below.		The proposed ARPT annual charges set for five years commencing 2013 are shown below.

−	{\| ~~cellspacing="1" cellpadding="1" border="1"~~	+	{\|
−	\|-	+
	\| Property value £2m to £5m		\| Property value £2m to £5m
	\| £15,000 p.a		\| £15,000 p.a
Line 74:		Line 73:
	= Capital gains tax (CGT) =		= Capital gains tax (CGT) =

−	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after ~~5<sup>th</sup>~~ March 2013 have to pay Capital Gains Tax (CGT) at a rate of 28%, with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty.	+	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5th March 2013 have to pay Capital Gains Tax (CGT) at a rate of 28%, with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty.

	Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.		Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.

−	Gains attracting the new 28% rate will be assessed from a base date of April ~~6<sup>th</sup>~~ 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.	+	Gains attracting the new 28% rate will be assessed from a base date of April 6th 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.
		+
		+	= Related articles on Designing Buildings Wiki =

−	~~= Find out more =~~	+	* Stamp duty land tax.

−	==~~= Related articles on Designing Buildings Wiki ===~~	+	= External references =
−	*Stamp duty land tax.	+

−	~~=== External references ===~~	+	* HMRC: Draft Finance Bill
−	*HMRC: Draft Finance Bill	+	* HMRC: [http://www.hmrc.gov.uk/sdlt/index.htm Stamp Duty Land Tax].
−	*HMRC: [http://www.hmrc.gov.uk/sdlt/index.htm Stamp Duty Land Tax].	+	* Residential research papers Dec 2012 by Knight Frank.
−	*Residential research papers Dec 2012 by Knight Frank.	+

−	[[Category:Property_law]]	+	[[Category:Property_law]] [[Category:Taxation]]
−	[[Category:Taxation]]	+

Designing Buildings at 14:08, 1 October 2015

2015-10-01T14:08:29Z

← Older revision		Revision as of 14:08, 1 October 2015
Line 23:		Line 23:
	The following is a summary of proposed and existing SDLT rates:		The following is a summary of proposed and existing SDLT rates:

−	{\| ~~style="width: 600px;" border~~="1" ~~cellspacing~~="1" ~~cellpadding~~="1"	+	{\| cellspacing="1" cellpadding="1" border="1"
	\|-		\|-
	\| Value up to £125,000		\| Value up to £125,000
Line 51:		Line 51:
	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.		ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.

−	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service is due to be up and running by June 2013 and will be provided free of charge.	+	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service is due to be up and running by June 2013 and will be provided free of charge.

	The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.		The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.
Line 57:		Line 57:
	The proposed ARPT annual charges set for five years commencing 2013 are shown below.		The proposed ARPT annual charges set for five years commencing 2013 are shown below.

−	{\| ~~style="width: 600px;" border~~="1" ~~cellspacing~~="1" ~~cellpadding~~="1"	+	{\| cellspacing="1" cellpadding="1" border="1"
	\|-		\|-
	\| Property value £2m to £5m		\| Property value £2m to £5m
Line 74:		Line 74:
	= Capital gains tax (CGT) =		= Capital gains tax (CGT) =

−	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay Capital Gains Tax (CGT) at a rate of 28%, with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty.	+	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay Capital Gains Tax (CGT) at a rate of 28%, with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty.

	Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.		Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.
Line 86:		Line 86:

	=== External references ===		=== External references ===
−	*HMRC: ~~[http://www.hmrc.gov.uk/budget-updates/march2012/finance-bill-2013-draft.htm~~ Draft Finance Bill]	+	*HMRC: Draft Finance Bill
	*HMRC: [http://www.hmrc.gov.uk/sdlt/index.htm Stamp Duty Land Tax].		*HMRC: [http://www.hmrc.gov.uk/sdlt/index.htm Stamp Duty Land Tax].
	*Residential research papers Dec 2012 by Knight Frank.		*Residential research papers Dec 2012 by Knight Frank.

Designing Buildings at 11:22, 17 December 2012

2012-12-17T11:22:23Z

← Older revision		Revision as of 11:22, 17 December 2012
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	\| 7%		\| 7%
	\|-		\|-
−	\| *Over £2m purchased by certain non natural persons	+	\| Over £2m purchased by certain non natural persons
	\| 15%		\| 15%
	\|}		\|}
Line 49:		Line 49:
	= Annual residential property tax (ARPT) =		= Annual residential property tax (ARPT) =

−	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section ~~referring to stamp duty~~. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.	+	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.

−	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service due to be up and running by June 2013 will be provided free of charge. The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.	+	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service is due to be up and running by June 2013 and will be provided free of charge.

−	The ~~following is a table of~~ proposed ARPT annual charges set for five years commencing 2013.	+	The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.
		+
		+	The proposed ARPT annual charges set for five years commencing 2013 are shown below.

	{\| style="width: 600px;" border="1" cellspacing="1" cellpadding="1"		{\| style="width: 600px;" border="1" cellspacing="1" cellpadding="1"
Line 72:		Line 74:
	= Capital gains tax (CGT) =		= Capital gains tax (CGT) =

−	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay CGT at a rate of 28% with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty. Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.	+	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay Capital Gains Tax (CGT) at a rate of 28%, with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty.
		+
		+	Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.

	Gains attracting the new 28% rate will be assessed from a base date of April 6<sup>th</sup> 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.		Gains attracting the new 28% rate will be assessed from a base date of April 6<sup>th</sup> 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.

Designing Buildings at 11:15, 17 December 2012

2012-12-17T11:15:33Z

← Older revision		Revision as of 11:15, 17 December 2012
Line 8:		Line 8:
	The new Stamp Duty rates based on the purchase/lease premium or transfer value of £2m plus residential property will be:		The new Stamp Duty rates based on the purchase/lease premium or transfer value of £2m plus residential property will be:
	*7% for private purchases by individuals.		*7% for private purchases by individuals.
−	*15% for purchases by “non natural persons”.	+	*15% for purchases by “non natural persons”. This includes companies, partnerships, and collective investment schemes.
−	~~<ul style="list-style-type: circle;">~~	+
−	~~<li>~~This includes companies, partnerships, and collective investment schemes.~~</li>~~	+
−	~~</ul>~~	+
−	~~</ul>~~	+
	Exemptions to the 15% rate (i.e. reduction to 7%) will apply to:		Exemptions to the 15% rate (i.e. reduction to 7%) will apply to:
	*Properties held for property development trading.		*Properties held for property development trading.
Line 47:		Line 44:
	\|-		\|-
	\| *Over £2m purchased by certain non natural persons		\| *Over £2m purchased by certain non natural persons
−
	\| 15%		\| 15%
	\|}		\|}
Line 53:		Line 49:
	= Annual residential property tax (ARPT) =		= Annual residential property tax (ARPT) =

−	~~<u></u>~~ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section referring to stamp duty. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.	+	ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section referring to stamp duty. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1<sup>st</sup> April 2013.

	Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service due to be up and running by June 2013 will be provided free of charge. The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.		Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service due to be up and running by June 2013 will be provided free of charge. The first ARPT tax return will be due on 1<sup>st</sup> October 2013 with payment due not later than 31<sup>st</sup> October 2013. This will then revert to an annual deadline from 30<sup>th</sup> April 2014 onwards.
Line 76:		Line 72:
	= Capital gains tax (CGT) =		= Capital gains tax (CGT) =

−	~~<u></u>~~“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay CGT at a rate of 28% with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty. Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.	+	“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5<sup>th</sup> March 2013 have to pay CGT at a rate of 28% with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty. Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.

	Gains attracting the new 28% rate will be assessed from a base date of April 6<sup>th</sup> 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.		Gains attracting the new 28% rate will be assessed from a base date of April 6<sup>th</sup> 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.
Line 83:		Line 79:

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Stamp duty land tax.	+	*Stamp duty land tax.

	=== External references ===		=== External references ===

Designing Buildings: Created page with " = Legislation = On 11^th December 2012 the draft Finance Bill 2013 was published. This proposes new taxes for residential property valued on April 1^st 2013..."

2012-12-17T11:07:44Z

Created page with " = Legislation = On 11th December 2012 the draft Finance Bill 2013 was published. This proposes new taxes for residential property valued on April 1st 2013..."

New page

= Legislation =

On 11th December 2012 the draft Finance Bill 2013 was published. This proposes new taxes for residential property valued on April 1st 2013 to be over £2m. It affects Stamp Duty Land Tax (SDLT), Capital Gains Tax and introduces a new Annual Residential Property Tax (ARPT). The objective of this legislation has been to persuade owners of £2m+ residential properties to stop using company wrappers, especially off shore companies to reduce or avoid tax liability.

= Stamp duty =

The new Stamp Duty rates based on the purchase/lease premium or transfer value of £2m plus residential property will be:
*7% for private purchases by individuals.
*15% for purchases by “non natural persons”.
<ul style="list-style-type: circle;">
<li>This includes companies, partnerships, and collective investment schemes.</li>
</ul>
</ul>
Exemptions to the 15% rate (i.e. reduction to 7%) will apply to:
*Properties held for property development trading.
*Properties acquired and held for commercially renting to third parties.
*Properties used for trading purposes which are opened to the public for at least 28 days a year.
*Properties held by registered charities.
*Company property used to provide employee accommodation.
*Farmhouses occupied by working farmers.
*Some specified diplomatic or publicly owned premises.

Apart from farmhouses and publicly owned premises, the above relief is conditional that no person connected with the owner of the dwelling occupies it beyond three years from the purchase date.

The following is a summary of proposed and existing SDLT rates:

{| style="width: 600px;" border="1" cellspacing="1" cellpadding="1"
|-
| Value up to £125,000
| Zero rated
|-
| Over £125,000 to £250,000
| 1%
|-
| Over £250,000 to £500,000
| 3%
|-
| Over £500,000 to £1 million
| 4%
|-
| Over £1m to £2m
| 5%
|-
| Over £2m
| 7%
|-
| *Over £2m purchased by certain non natural persons

| 15%
|}

= Annual residential property tax (ARPT) =

ARPT levied on residential property will only be applied to premises held by “non natural persons” as described in the previous section referring to stamp duty. Similar exemptions will also be applied to ARPT. Again the valuation date will be set at 1st April 2013.

Property owners will submit their own valuation to Her Majesty’s Revenue and Customs (HMRC). Where the value assessment is within 10% of an ARPT threshold band, owners can apply to HMRC for a “pre-return banding appraisal” prior to submitting their valuation. This service due to be up and running by June 2013 will be provided free of charge. The first ARPT tax return will be due on 1st October 2013 with payment due not later than 31st October 2013. This will then revert to an annual deadline from 30th April 2014 onwards.

The following is a table of proposed ARPT annual charges set for five years commencing 2013.

{| style="width: 600px;" border="1" cellspacing="1" cellpadding="1"
|-
| Property value £2m to £5m
| £15,000 p.a
|-
| Over £5m to £10m
| £35,000 p.a
|-
| Over £10 to £20m
| £70,000 p.a
|-
| Over £20m +
| £140,000 p.a
|}

= Capital gains tax (CGT) =

“Non natural persons” and some categories of non residents disposing of residential property of a value of £2m+ will after 5th March 2013 have to pay CGT at a rate of 28% with a taper relief for those properties close to the £2m threshold. The descriptions of non natural persons and exemptions are the same as those set out in the section on stamp duty. Trustees of offshore trusts will not be liable to CGT however the gains may be taxed on UK beneficiaries as is current practice.

Gains attracting the new 28% rate will be assessed from a base date of April 6th 2013 and will not be retrospective. However the government is considering switching the current tax regime for disposals by UK non natural persons from corporation tax (23% in 2013, dropping to 21% in 2014) to capital gains tax.

= Find out more =

=== Related articles on Designing Buildings Wiki ===
*Stamp duty land tax.

=== External references ===
*HMRC: [http://www.hmrc.gov.uk/budget-updates/march2012/finance-bill-2013-draft.htm Draft Finance Bill]
*HMRC: [http://www.hmrc.gov.uk/sdlt/index.htm Stamp Duty Land Tax].
*Residential research papers Dec 2012 by Knight Frank.

[[Category:Property_law]]
[[Category:Taxation]]