News: March 2014
Capital Taxes
Enveloped Dwellings
The annual tax on enveloped dwellings (ATED) applies where a residential property located in the UK is owned by a non-natural person such as; a company, partnership with a corporate member or a collective investment scheme. There are a large number of reliefs and exemptions from the charge, but where such a relief does not apply the ATED charge must be paid by 30 April within the year at the following rates:
| Property value £ | Annual charge 2013/14 £ | Annual charge 2014/15 £ |
|---|---|---|
| Up to 2,000,000 | Nil | Nil |
| 2,000,001-5,000,000 | 15,000 | 15,400 |
| 5,000,001-10,000,000 | 35,000 | 35,900 |
| 10,000,001-20,000,000 | 70,000 | 71,850 |
| Over £20,000,000 | 140,000 | 143,750 |
From 1 April 2015 the ATED charge is to be extended to properties with value of £1m to £2m. Then from 1 April 2016 the ATED charge will be extended to properties worth £500,001 to £1 million. The 15% rate of Stamp Duty Land Tax on such properties worth over £500,000 comes into effect from 20 March 2014 -; see below.
Capital Gains Tax
The rates and annual exemption for capital gains tax are as follows:
| 2013/14 | 2014/15 | |
|---|---|---|
| Annual exemption | £10,900 | £11,000 |
| Annual exemption for most trustees and personal representatives | £5,450 | £5,500 |
| Rate for gains within the basic rate band | 18% | 18% |
| Rate for gains above the basic rate band | 28% | 28% |
| Rate for gains subject to entrepreneurs relief | 10% | 10% |
| Lifetime limit for gains subject to entrepreneurs relief | £10 million | £10 million |
Private Residences
As announced in December 2013 the 36 month tax free period when a persons main home is sold, is reduced to 18 months for most disposals made after 5 April 2014. Where the home owner or their spouse is disabled or has moved into a residential care-home, the 36 month tax free period will still apply.
The Government will consult on how to charge capital gains tax on disposal of UK homes by individuals who are not tax resident in this country.
Rollover Relief
Disposals of payment entitlements by farmers under the EU Basic Payment Scheme will qualify for business asset rollover relief with retrospective effect from 20 December 2013.
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