Significant changes have been made to the taxation of UK residential property in recent years, making it increasingly difficult to determine the correct holding structure. Certain measures (e.g. Annual Tax on Enveloped Dwellings (ATED), 15% Stamp Duty Land Tax (SDLT)) appear to deter ownership of residential property through companies whereas other measures (e.g. interest relief restrictions for income tax payers and the reduction in the capital gains tax (CGT) rate on shares) appear to encourage corporate ownership.
The Annual Tax on Enveloped Dwellings regime first introduced in October 2013 now captures any residential property valued at over £500,000 on 1 April 2017 owned by a corporate. Properties that have been within the ATED charge previously were required to be revalued as at 1 April 2017.