Matthew Peters, Partner at Bruton Knowles has alerted landowners to beware the full implications of the Annual Tax on Enveloped Dwellings (ATED) threshold which is reduced to £500,000 in April 2016.
Matthew said: “This reduction will make a lot of difference and people might not necessarily be aware of the full implications, potential problems and the reliefs available.”
Enveloped properties are residential homes owned by a company or non-resident – typically top London addresses, second homes or holiday cottages on country estates.
If the property is valued at £500,000 or more it will be subject to a £3,500 charge due by October this year.
Matthew Peters went on: “This is likely to affect a great many owners across Gloucestershire as residential property values have increased significantly and brought many more properties within this category. While farmhouses which are used as such are exempt, people who hold a farm or buildings in a trust or offshore company will be eligible for the new tax.”
He added: “ATED was originally introduced by HMRC in a bid to claw back money from people who use company set-ups to avoid large tax bills. But with farm and estate properties worth so much more the net has been extended out into the regions. Our valuation team is advising clients on the extent to which they are affected.”
Properties which are affected will be able to claim against a number of reliefs, but returns will still need to be filed.
Matthew said farmhouses used for agricultural purposes, property rentals to an unconnected third party, historic houses and employee accommodation could qualify for relief.