RESIDENTIAREAL ESTATE

The UK government introduced an annual tax on enveloped dwellings (ATED) in 2013 on real estate held within corporate structures. Originally implemented on real estate valued at more than £2million, the tax was commonly referred to as the Mansion Tax. However, the value at which this tax is applied has been significantly reduced and since 1 April 2016 applies to residential real estate worth more than £500,000. For clients who own a number of homes and use a corporate structure the changes to the value threshold can present considerable challenges.

The UK government introduced an annual tax on enveloped dwellings (ATED) in 2013 on real estate held within corporate structures. Originally implemented on real estate valued at more than £2million, the tax was commonly referred to as the Mansion Tax. However, the value at which this tax is applied has been significantly reduced and since 1 April 2016 applies to residential real estate worth more than £500,000. For clients who own a number of homes and use a corporate structure the changes to the value threshold can present considerable challenges.

The ATED period runs from 1 April to 31 March each year. The tax is payable annually by the beneficial owner of the property. The charges for the 2016-17 year range from £3,500 to £218,200 + CPI. Relief from ATED is available where the property is used for business purposes including investment, development and trading.

Lancaster Knox can provide bespoke advice to clients on property holding structures, funding arrangements, disposal strategies, capital allowance claims and capital gains tax.