...Enveloped Dwellings (ATED) to residential property:
In response to the Chancellor's Autumn Statement announcement, Kersten Muller, partner in real estate tax at business and financial adviser Grant Thornton UK LLP, comments on the implications of the changes to the Annual Tax on Enveloped Dwellings (ATED) to residential property:
"ATED is the annual tax that applies to residential properties held in corporate entities and similar structures. Exemptions exist for properties owned for rental or business purposes.
"ATED previously increased in line with CPI each year. Today’s announcement means that from April 2015 there are significant increases in the tax for residential properties worth £2m or more. An owner of a house worth between just over £2m and £5m will now be subject to ATED at £23,350 - up from £15,400 – if owned in a company and not falling within one of the exemptions. At the upper end, residential properties worth more than £20m will result in an annual tax of £218,200, up a staggering £74,450!
"This, combined with the SDLT changes at the upper end is undoubtedly going to have an impact on the residential property market in London. These measures do seem to achieve the Chancellor’s objective of rebalancing taxes towards the wealthier end."