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Homes Worth Over 2 million pounds!
Newsletter issue - July 2012.
The Government wants to clamp down on tax avoidance by people who purchase their homes through companies, or other structures like trusts or partnerships, (known as non-natural persons). It is proposing new tax charges will be applied follows:
a) From 1 April 2013 an annual charge will apply on the value of residential property worth £2 million of more owned by non-natural persons; and
b) From 6 April 2013 Capital Gains Tax (CGT) will be charged on the disposal of residential property where the selling price is £2 million or more, and the seller is a non-natural person who is not resident in the UK.
There will be an exemption from the annual charge for established property development businesses, but only if the business has been operating for at least two years.
When a UK based company sells a property it already pays UK corporation tax on the gain, similarly a UK based partnership or trust would pay UK tax on any profits it makes selling property in the UK or elsewhere. A company or other non-natural person based outside the UK for tax purposes does not pay UK tax on the sale of a UK property, so the new CGT charge is designed to level the tax playing field with UK-based property owners.
If you own high value residential property within a company or other structure you may want to take steps to remove it from that structure, especially if the company is based outside of the UK. There may well be other issues to consider in removing a property from the structure so please talk to us before taking any action.
What our clients say about us...
"Paul has provided accountancy services to my company for 2 years now. I can recommend Paul very highly; his skills as an accountant are highly detailed and professional and he is always available to provide advice. One aspect of the way Paul works that I greatly appreciate is a preference to meet face to face when there is a detailed conversation to be had. I personally find this more productive and is a benefit of working with a small accountancy firm that you wouldn't get with the large faceless providers."
ALISTAIR FAIRWEATHER - PROGRAMME & PROJECT MANAGER, DELIVERING/RESCUING I.T. 7 BUSINESS CHANGE WITH BUDGETS UPTO £50M INC SUPPIER MANAGEMENT
"I couldn't ask for more from Paul as an Accountant. Paul has been accountant to Work Relief Charity Recruitment for just over a year now and is proving an invaluable asset. Accurate, knowledgeable, flexible with an emphasis on service delivery, I would recommend Paul's services to any organisation looking for an accounts professional."
Neil Price - Managing Director at Work Relief Charity Recruitment
"Paul was a referral from a family member when I started my business 2 years ago. As this was the first time I had ever run my own company I was totally clueless over the financial side of matters and was worried that I may have made mistakes in any of my accounting. I needn't have worried as after enaging Paul for a set monthly fee he was always there on the end of the phone for all sorts of questions I had and no matter how trivial they were Paul gave me all the information I required and more and did an excellent and painless job at the end of my first year! Couldn't ask for any better to be honest. Just two words - hire him!!!"
Lee Westrap MBCS - Director - Bulldog IT Services
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