Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

U.K. to Levy Tax on Luxury Homes Owned by Offshore Companies

Dec. 11 (Bloomberg) -- The U.K. government will introduce on annual tax on residential real estate valued at more than 2 million pounds ($3.2 million) that’s owned by an offshore company.

The charge will begin in April, the U.K. Treasury said in a draft of the bill today. Owners of homes valued at more than 20 million pounds may have to pay a levy of as much as 140,000 pounds a year, according to the Conservative-led government’s annual budget report in March.

Prime Minister David Cameron targeted the wealthy to pare a record budget deficit by lifting a transaction tax, known as stamp duty, to 7 percent from 5 percent on homes sold for more than 2 million pounds. The government is also introducing capital-gains tax on home sales by non-naturalized owners valued at more than 2 million pounds.

“It is designed to deter high-value residential properties being ‘enveloped’ within a company so as to prevent an opportunity for stamp duty land tax avoidance on future sales,” Sean Randall, real estate tax director at Deloitte LLP, said by e-mail.

Farmhouses valued at more than 2 million pounds and occupied by working farmers will qualify for relief from the new tax, according to the draft legislation. Homes owned by a charity and held for charitable purposes can also gain an exemption.

“Farmers would have been unfairly penalized because there are a number of business benefits to being incorporated,” Knight Frank LLP said on its website.

To contact the reporter on this story: Chris Spillane in London at cspillane3@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.