Residential property is one of the largest asset classes in the UK. Unsurprisingly it has attracted the attention of government who have extended the scope of taxation to residential property transactions including:
- The phasing out of tax relief for interest against rental income for individuals who own buy-to-let properties
- Introducing a 3% Stamp Duty Land Tax surcharge from 1 April 2016 on the purchase of additional residential properties
- Introducing ATED – the Annual Tax on Enveloped Dwellings – and then extending the reach of ATED to lower value properties
- Reducing the deemed period of occupation for main residence relief from 36 to 18 months for capital gains tax purposes
- Introducing capital gains tax on the disposal of residential property by non-residents with effect from 6 April 2015
- Successively introducing significantly higher rates of Stamp Duty Land Tax on the purchase of residential property
For individuals with a single residential property owned personally, these changes will have a limited impact. But for individuals with multiple residences in the UK and overseas, these changes will add a significant complexity to their residential property owning arrangements and will require careful and considerate thought as to the best way to proceed in the future.
With our extensive experience in residential property, Ritchie Phillips can help you navigate the complexities of owning more than one home and help you reduce your exposure to the various forms of taxation now applying to residential property in the UK.