Annual tax on enveloped dwellings will be universally (H)ATED
20 March 2013
Patrick Stevens, EY tax partner commented:
“The Chancellor has confirmed the introduction of the aptly named Annual Tax on Enveloped Dwellings. Aptly named as the measure will be universally ‘(h)Ated by those in the property sector!’
“The new ATED was announced at Budget 2012 as a measure designed to discourage individuals from owning property in corporate ‘envelopes’ as a means of avoiding stamp duty land tax. Following a consultation, which began in summer 2012, a number of reliefs have been introduced to prevent most residential property used for commercial purposes from being affected.
“However, the new taxes remain extremely complex and will impose additional compliance burdens on businesses. It is even more unfortunate because these structures have generally not been used to avoid Stamp Duty Land Tax in the first place. They are mainly used by overseas investors for commercial and family purposes.”