Capital Taxes

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 person’s 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.