Capital gains tax (CGT) on a
disposal of the property at a gain
up to a rate of 28%;
Inheritance tax (IHT) on death at
40% on the value (above a nil rate
band, currently £325,000. From 6
April 2017, an additional nil rate
band will be introduced on the
net value of an interest in residential property, passed to a direct
descendant on death, starting at a
maximum amount of £100,000 in
2017/18 and up to £175,000 from
2020/21. However, this will make
no difference to owners of very
valuable residential property, as
there will be tapered withdrawal
of the band for UK estates valued
at more than £2million, which will
be withdrawn at a rate of £1 for
every £2 over this threshold) or, in
specified circumstances, during an
individual's lifetime at 20%;
ATED: the Annual Tax on Enveloped
Dwellings (ATED), introduced
in April 2013, now applies to
residential properties valued over
£1 million and owned through a
company or certain other "nonnatural persons" (for example a
partnership with
a corporate partner). From 1 April
2016 the lower value limit will be
£500,000. ATED is currently payable
annually at the following rates:
ATED
Property Value
––£1 – 2m
£7,000
––£2 – 5m
£23,350
––£5 – 10m
£54,450
––£10 – 20m
£109,050
––More than £20m
£218,200
SDLT: In addition, Stamp Duty
Land Tax (SDLT) is payable by
purchasers of UK property, at the
following rates:
––the first slice of the purchase
price from £0 to £125,000 - 0%;
––the second slice of the purchase
price from £125,001 to £250,000
- 2%;
––the third slice of the purchase
price from £250,001 to £925,000
- 5%;
––the fourth slice of the purchase
price from £925,001 to
£1,500,000 - 10%;
–– the fifth slice of the purchase
price from £1,500,001 upwards
- 12%.
The rate increases to 15% for
residential property valued over
£500,000 acquired by a company
or other non-natural person.
This rate is payable on the entire
purchase price, and is due unless
there is an applicable relief, e.g. for
a property acquired by property
developers or to be used in a
rental business.
Options for acquiring
UK property
The principal options available for a
non-resident & non-domiciled person
acquiring UK property are, as follows:
Direct ownership by the individual;
Ownership through a singlepurpose, foreign-registered
holding company, the shares of
which are owned by the individual;
and
Ownership through a foreignregistered holding company,
the shares of which are owned
by non-UK resident trustees
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