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Legal Q&A with Vanessa Crawley

Publication: RICS Property Journal

Q: I have a client who wishes to sell a property that is enveloped in a company. Given HMRC scrutiny in this area, what needs to be done to ensure this sale complies with the law?

A: This year’s budget saw the Chancellor continue to focus on high-value residential property (HVRP) owned by companies, partnerships with corporate members of collective investment schemes. HVRP is defined as that being worth more than £500,000 though until the 1st April the threshold was £1m. The Chancellor’s objective in targeting HVRP appears to be to tackle tax avoidance head on, in particular stamp duty land tax (SDLT) avoidance.

The finance Act 2013 introduced an annual tax on enveloped dwellings (ATED) to deter individuals from using UK companies to acquire or hold HVRP. A 15% SDLT rate for HVRP was introduced by the previous Finance Act in 2012…

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