Further rules were introduced in the Budget today which will impact UK properties owned by overseas entities valued at between £500,000 and £2 million. The Treasury said that this would affect 12,000 individuals.
Greg Limb, tax partner at KPMG, said: “For those owners who are already letting their properties or using them in a business, there should be no further taxes to pay – however, there will be an additional compliance and paperwork burden in the future."
“Where this really hits though is individuals and companies who are keeping their properties empty. They will now have a choice of paying an annual charge of up to £7,000 per property or renting the property out and paying tax on any rental profit. Whilst there are many non-tax reasons for holding a property in an offshore company, this may force many people to reappraise existing structures and use of the property. There was a further sting in the tail within the proposals that will potentially see a stamp duty charge of 15% from midnight tonight."
“However, it remains too early to say whether this will help cure the blight of empty properties in the capital that has been much commented on and debated. Estate agents will doubtless be hoping!”
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Chancellor’s Budget 2014
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