In the March 2012 Budget the UK government, in their battle against tax avoidance, announced certain proposals to tax high-value residential properties held in “enveloping” structures such as offshore companies. HMRC released a Consultation document at the end of May 2012 and responses to this Consultation are expected in the autumn.
In summary, the government proposes a three-pronged approach to combat avoidance:
- The introduction from 21 March 2012 of a 15 per cent rate of SDLT on acquisitions of residential dwellings costing more than £2 million by certain non-natural persons (companies, partnerships including a company and collective investment vehicles);
- Levying from 1 April 2013, an annual charge on residential property owned by non-natural persons; and
- From 6 April 2013, the extension of Capital Gains Tax (CGT) to gains on the disposal of residential property by non-resident companies and others (but not individuals).
We provide some information below on the new residential property “enveloping” rules.
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