Capital Gains Tax
If you own a property (or a share in a property) aside from your home, and it increases in value, when you sell it, you will have to pay tax on the gain. This is calculated by valuing the property at the time you bought it and at the time you sell it. We can help you make sure these valuations (including retrospective valuations) are accurate so that you pay the correct amount of tax, and no more.
We will provide you with a valuation report in accordance with The Taxation and Chargeable Gains Act 1992 (Section 272), and the RICS UK Guidance Note 3. The report will be clear, reasoned and concise.
If the valuation is queried by the District Valuer (who provide valuations for and advise HMRC on property), we can also negotiate with them for you. We are uniquely qualified to handle these negotiations because Edmund Ellis worked for many years in the Statutory Valuations Team for the District Valuer.
We can help with 1982 market valuations. If you are trying to sell a property which was bought before 31st March 1982, capital gains tax is calculated on the basis of what its market value was on that date. It is very important to give HMRC the most accurate figure you can, so they can calculate how much tax is due. They will also scrutinise the figure you give them, so it is important that it is reasoned and clear.
The property market in 1982 was very different to the highs of the current market—the interest rate was 13% and the average UK house price was less than £25,000—and the situation is even more complicated by lack of data and by tenancies which confused and changed the values of properties. We have extensive experience in undertaking 1982 (and historic) valuations for capital gains tax, and a large database of historic transaction data, so we can help you provide an accurate, reasoned valuation. We can also handle negotiations with the District Valuer if necessary.
Contact us for more information or to book a valuation.
Capital gains tax for non-residents disposing of residential property
If you own property in the UK and don’t live here, from April 2015, you’ll have to pay Capital Gains Tax on the residential property you sell.
This applies to all UK residential property including properties being built or developed for residential use. (Some properties designed for communal use are excluded, such as nursing homes, boarding schools and student accommodation.)
The charge will apply to gains made by people, companies, partnerships, and trusts who are not UK residents, but if you have lived in the property, you may be able to apply for Principle Private Residence Relief.
For individuals the tax will be charged at either 18% or 28% depending on the rate of tax you pay. Trustees will be charged at 28% and companies at 20%.
The tax will be calculated on what the property’s market value was on 6th April 2015, so even if you are not planning to sell your property, we strongly recommend to value the property now, so that if and when you do sell your property, you pay the correct amount of tax, and no more.
Elysium Surveyors are highly skilled at undertaking valuations for tax purposes.
Contact us for more information or to book a valuation.
Annual Tax on Enveloped Property (ATED)
What is ATED?
Annual Tax on Enveloped Properties is a new tax payable by companies on high value residential properties in the UK, and is payable each year. The law has recently change on ATED, so it may be wise to get advice if you are unclear whether you need to pay, or how much.
Do I need to pay ATED?
Yes, if your property is:
· a “dwelling” (this includes mixed use buildings where some of which are residential).
· in the UK.
· owned , either wholly or partly, by a company, a partnership where one of the partners is a company, or a collective investment vehicle.
· valued at more than £2 million on 1st April 2012 or when you bought it, for tax returns from 2013-2014 onwards.
· valued at more than £1 million on 1st April 2012 or when you bought it, for tax returns from 2015-2016 onwards. (As announced in the 2014 Budget).
You may be exempt if:
1. Your property is a hotel, guest house, student hall of residence, care home or prison.
2. If the company is a charitable trust using the property for charitable purposes.
How much do I need to pay?
It depends on the value of the property. To work out how much you need to pay, you need to find out which value band your property is in.
As well as reducing the value threshold at which ATED becomes payable, the 2014 Budget also announced that ATED charges would increase in line with the Consumer Price Index.
There are reliefs available (for example if your property is a historic house open to the public, or if it is a working farmhouse) but you can only be eligible if you file a return.
Your property may also move in and out of ATED if you change how you use it.
ATED operates on a five-year rolling programme. The first valuation date was 1st April 2012 and the next will be 1st April 2017.
How can we help?
ATED is a self-assessment tax, and late returns may be liable to penalties and interest charges. So if you think you may be liable for ATED, either now or in the future, as the threshold for payment is reduced, or if you do not know what value band your property is in, Elysium Surveyors can help you navigate this territory.
Elysium Surveyors are highly skilled in undertaking valuations for tax purposes. We understand the local nuances of the London market and hold a large database of transactions to undertake and support our valuations with confidence.
If HMRC challenge the valuation, we can negotiate with the Valuation Office Agency (who assess property valuations on behalf of HMRC) for you, to make the process as easy as possible, and to make sure that you pay the right amount of tax, and no more.
Contact us for more information.