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Insight

High Value Dwellings - an update

Nick Beecham
03/12/2012
Consultation on the forthcoming tax regime for high value dwellings ended in the summer.  Draft legislation will be published shortly after delivery of the Autumn Statement on 5 December.   Some Consultation on the forthcoming tax regime for high value dwellings ended in the summer.  Draft legislation will be published shortly after delivery of the Autumn Statement on 5 December.   Some notable representations received by the Government during the consultation process related to the following issues:

1. The very short available time for restructuring if the new regime comes into effect in April 2013;

2. Using a charge to capital gains tax to effectively enforce the payment of SDLT is illogical and produces some perverse results - for example under the current proposals, the sale of shares by a non-UK resident individual in a company owning a high-value dwelling will be outside the scope of SDLT and CGT, whereas the sale of the dwelling itself by the company will be subject to both SDLT and CGT;

3. The need to define precisely how offshore partnerships will be categorised for the purposes of the proposed annual charge and CGT;

4. A plea for some exemptions from the new regime, for example where there are unconnected investors in a fund which owns a dwelling.

It is to be hoped that the draft legislation will address these and other issues raised.

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