PracticeAccounting FirmsLondon property amasses 90% of HMRCs high-end tax bonanza

London property amasses 90% of HMRCs high-end tax bonanza

The latest figures show the taxman raised £100m through the Annual Tax on Enveloped Dwellings (ATED) in 2013-14, with the capital contributing £89m.

NEARLY 90% of HMRC’s income generated from a new national tax targeting high value homes is amassed from properties in London.

The latest figures show the taxman raised £100m through the Annual Tax on Enveloped Dwellings (ATED) in 2013/14, with the capital contributing £89m.

ATED was introduced in April 2013 as part of a series of measures to increase the tax take from the super-rich and clamp down on tax avoidance by those owning property through corporate entities, while never using them for commercial reasons. It levies an annual tax charge on residential properties valued at over £2m held within a corporate “envelope”.

HMRC’s figures show that 85% of nationwide receipts from the tax come from just four London boroughs.

Westminster property owners shelled out £52m, while £28m was coughed up by the financial elites of Kensington and Chelsea. Camden contributed £3m and Barnet, home to the ostentatiously infamous Bishops Avenue, where the Sultan of Brunei, the Saudi Arabian royal family and soft porn baron Richard Desmond all own property, paid £2m.

Mark Giddens, tax partner at UHY Hacker Young, said: “Once again, London’s wealthy expatriate population is bearing the brunt of the Treasury’s innovation in taxes. Having just recently been hit by an increase in the nom-dom tax levy, foreign ‘High Net Worths’ (HNW) are beginning to feel targeted.

“The vast majority of tax receipts are clustered around the mansions of Westminster and Kensington and Chelsea, the traditional heartlands of foreign HNWs.”

“It’s crucial that the government strikes the right balance in encouraging HNW and foreign investment to the UK.”

Qualifying properties valued between £2m and £5m face an annual charge of £15,400 rising to £35,900 for homes worth £5m to £10m, and £71,850 for those over £20m. Anything higher than this is slapped with a £143,750 tax bill.

 

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