Publications that covered this story include City AM on 16 February.
- Westminster and Kensington and Chelsea pay £126m of £175m receipts
77% (£126m of £175m) of HMRC’s total take from a tax on high value homes held through a company is collected from properties in Westminster and Kensington and Chelsea, our research shows.
Despite the extension of the Annual Tax on Enveloped Dwellings (ATED) to values in the range of £500,000 to £1 million (catching over 2,000 properties for the first time) there was a 2% fall in receipts from the Annual Tax on Enveloped Dwellings (ATED) in 2016-17 (2015-16 tax receipts £178m).
The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2013 as the first of a series of measures designed to discourage the holding of residential properties in ‘corporate envelopes’ and to remove the tax advantages previously associated in such structures.
From April 2017, Inheritance Tax has been extended to UK residential properties held via corporate structures, removing one of the main motives for corporate structuring.
Mark Giddens, tax partner in our London office, comments: “While ATED has had some impact in changing behaviour, it has also become a useful little revenue raiser for HMRC – it is self-assessed, operates with the minimum of admin and is paid primarily by offshore entities.”
“Subsequent tax changes have made corporate structuring less attractive but, given that ‘de-enveloping’ often has a tax cost, they are unlikely to have a dramatic effect on the number of properties caught by ATED.”
“More significant are likely to be moves for greater transparency in terms of property ownership and any further wobbles in the London property market.”