Taxes can be eliminated or minimized if property acquisition is structured properly

 

Wondering which UK property taxes affect you?

  Every property that you own or acquire goes through a life cycle and every stage has different taxes associated with A good understanding of the tax laws and regulations are therefore key in ensuring tax efficiency and compliance with the tax laws. We have segregated property taxes into four stages:
  • Taxes on property acquisition : Stamp Duty Land Tax
  • Ongoing taxes: Rental income tax and Annual tax on enveloped dwellings
  • Taxes on sale: Capital Gains Tax
  • Death of owner: Inheritance tax

Property Tax UK : Life cycle

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Taxes on Property Acquisition

Stamp Duty Land Tax
When you buy a residential property you are required to pay SDLT. The amount payable is upto 7% and can go higher if ATED applies.
UK Resident upto 7%
UK Non Resident upto 7%
   
 
 
Practical Planning Tip
There will be reliefs available for the 7% SDLT rate for certain types of business. Contact us to to see how we can assist you.
 

Annual Tax Filing


When owning a property in the UK there are certain taxes that need to be paid annually. These are as follows:

Rental Income Tax
If you own a property in the UK that is rented out; the net rent will be subject to UK Income tax. This can be at rates of upto 45%
UK Resident upto 45%
UK Non Resident upto 45%

Annual Tax on Enveloped Dwellings
There is a new annual charge on residential properties owned by offshore companies known as Annual Tax on Enveloped Dwellings (ATED). Depending on your property value ATED can be anywhere upto GBP 140,000.  

UK Resident upto £ 140,000
UK Non Resident upto £ 140,000
 
 
Practical Planning Tip
  • Income tax returns should be filed annually
  • Registration required with HMRC if non UK resident landlord
  • ATED return should be filed annually
  •  

    Taxes on Property Sale

    Capital Gains Tax
    The sale or gift of property usually triggers a Capital Gains Tax and it normally at 28% of the gain. The gain in the difference between what you spent on buying the property and it's sale price. 
    UK Resident 28%
    UK Non Resident usually 0%
       
     
     
    Practical Planning Tip
    If you are non UK domiciled you may be able to avoid CGT altogether by careful structuring. Contact us for advice.
     



    Taxes on owner death

    Inheritance Tax (IHT)
    The value of your property will generally be subject to IHT which is at 40%.  
    UK Resident 40%
    UK Non Resident 40%

     
     
    Practical Planning Tip
    You can avoid inheritance tax if your property is owned by offshore structures. Contact us to find out how we can help.