Other Measures
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Other Measures

Other Goods

Annual tax on enveloped dwellings


The ‘Annual Tax on Enveloped Dwellings’ (ATED) was introduced for 2013/14. It applies a flat rate charge based on bands of value to residential property in the UK worth over £2m which is owned by a non-natural person. There are a number of exemptions, such as for working farmhouses or other employee accommodation, and rental properties.


The rates of ATED have increased in line with inflation for 2014/15. Charges for the coming year range from £15,400 (up from £15,000) on a property valued between £2m and £5m to £143,750 (up from £140,000) for a property valued above £20m.


In addition, the scope of the tax will be extended from April 2015 to cover ‘enveloped’ residential properties with a value over £1m, and from April 2016 to values over £500,000.


Accelerated payment of tax in avoidance cases


Taxpayers who have entered into tax avoidance schemes falling under the Disclosure of Tax Avoidance Schemes rules or the General Anti-Abuse Rule, or which have been ruled against in a court case, will have to pay the tax in dispute within 90 days of HMRC issuing a notice requiring payment. The taxpayer can still take the matter to court and recover the tax if successful. However, the scheme will no longer confer the cash-flow advantage of not having to pay the tax until the end of any litigation.


Anti-avoidance measures: partnerships


Following consultation during 2013, the government is enacting measures to counteract the use of partnerships for tax avoidance purposes in three areas:


  • disguised employment relationships.
  • tax-motivated allocations of business profits or losses.
  • tax-motivated disposals of assets through partnerships.


The new provisions apply with effect from April 2014.


Other points


The day before the Budget, Nick Clegg announced proposals for generous tax relief for childcare costs – but not until Autumn 2015.


There will be new investment incentives for ‘social enterprises’ from April 2014, but few details yet.