Stamp Taxes and ATED LAYTONS

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1 Stamp Taxes and ATED LAYTONS S O L I C I T O R S

2 Our expertise Banking & Finance Charities Commercial Construction Corporate Corporate Tax Disputes Employment Family & Matrimonial Immigration Information Law Insolvency & Restructuring IP, Technology & Media Planning Real Estate Trusts Estates & Private Client This information is offered on the basis that it is a general guide only and not a substitutefor legal advice. We cannot accept any responsibility for any liabilities of any kind incurred in reliance on this information.

3 Stamp Taxes and ATED On 9 th December the government published draft legislation to extend reliefs from the 15% SDLT rate and ATED together with a policy paper. These documents are available at publications/annual-tax-on-enveloped-dwellings-and-stamp-duty-land-tax-extension-of-scope-of- Presently, relief from the 15% SDLT rate and ATED is available where a dwelling is to be occupied by an employee of a trade, subject to certain conditions being satisfied. This relief is to be extended to apply in respect of employees of a qualifying property rental business. A new relief from both the 15% SDLT rate and ATED is to apply where a dwelling is occupied by a person employed as a caretaker in a building of multiple occupancy, such as a block of flats. The above reliefs are to apply with effect from 1st April 2016, so anyone seeking to take advantage will need to ensure that the effective date of the transaction does not arise before that date. With regard to the new additional rate of SDLT on second homes, which is to apply with effect from 1 st April 2016: The policy paper published on 9 th December states that draft legislation will be published for consultation in January A new relief from the 15% SDLT rate and ATED is to apply where an interest in a property is held exclusively for the purpose of an equity release scheme where the activity is regulated by the Financial Conduct Authority. A new relief from the 15% SDLT rate will apply where a business purchases a property either for demolition or conversion for non residential use. This relief will be withdrawn if, within a period of three years from the effective date of the transaction, demolition or conversion has not begun or the property is used as a dwelling. In answer to a question put to the Chancellor of the Exchequer, Mr David Gauke, the Financial Secretary to the Treasury, responded that foreign investors and non UK domiciliaries are to be treated in exactly the same way as UK residents and that if purchasers of residential property in the UK own another property anywhere else in the world and are purchasing an additional property in England, Wales or Northern Ireland, they will be charged the additional rate. The proposed additional SDLT charge is having a materially adverse effect on the residential property market as reported in the Evening Standard on 14 th December. 3 Stamp Taxes and ATED LAYTONS S O L I C I T O R S

4 About the Author Marc Selby Marc is head of Corporate Tax since his is arrival in Marc is a member of: The Chartered Institute of Taxation, and sits on the Institute s Property Taxes Sub-Committee and is the Technical Officer, Indirect Taxes of the Institute s Harrow and North London Branch The VAT Practitioners Group. The Stamp Taxes Practitioners Group, of which he is a founder and Council member. Marc regularly contributes articles to professional journals, particularly on VAT and stamp taxes. He also has a busy consultancy practice, in which he advises other professionals, including lawyers and accountants, on the tax aspects of corporate and property transactions. 4 SDLT: Autumn Statement LAYTONS S O L I C I T O R S

5 Our Corporate Tax Offering Laytons Tax Group includes Chartered Tax Advisers and covers the full range of direct and indirect taxes. We regularly work with colleagues in other practice areas, particularly corporate, real estate, private client, intellectual property and employment, to provide practical and commercial solutions. We are also experienced in working with the client s own advisers, often other professionals who may be solicitors or accountants, in providing technical tax support on transactions and structures on which they are advising. We recognise that the tax planning environment has changed radically over recent years and that there is now far greater statutory regulation and control over perceived, as well as actual, tax avoidance. Tax advisers must now understand and advise on increasingly complex anti avoidance rules, including the new rules which allow the UK tax authority to demand up front payment of disputed tax where they are challenging a scheme. We strive to achieve what is practical and possible and draw attention to the real risks. A significant part of our practice includes assisting other professionals, including solicitors and accountants, on a consultancy basis on the tax aspects of transactions on which they are advising. We have broad experience of cross-border transactions and expertise in direct and indirect tax matters. Experience We advise across a wide spectrum reflecting the breadth of Laytons firm-wide practice. We regularly advise on: Corporate transactions and structures including mergers and acquisitions, de-mergers, reconstructions, private equity transactions and joint ventures Property transactions and structures including stamp duty land tax, annual tax on enveloped dwellings, VAT and capital allowances Remuneration and benefits employee share and share option schemes, employee benefit trusts, remuneration planning and taxation of expatriate employees (inbound and outbound) Cross border inbound and outbound

6 London 2 More London Riverside London SE1 2AP +44 (0) london@laytons.com Manchester 22 St. John Street Manchester M3 4EB +44 (0) manchester@laytons.com Guildford Ranger House, Walnut Tree Close Guildford GU1 4UL +44 (0) guildford@laytons.com Laytons Solicitors LLP which is authorised and regulated by the Solicitors Regulation Authority (SRA Nº ). A list of members is available for inspection at the above offices.