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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4808
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Hi. I am looking to purchase a residential property in the

Customer Question

Hi. I am looking to purchase a residential property in the UK on a buy-to-let basis. The property will be purchased by a company and I will be the beneficial owner of the company (legally the shares will be held by a trustee). the company will secure a mortgage on the property and the value of the equity will be funded by me via a shareholder loan. will this scheme fall under the scope of ATED ?
Submitted: 4 years ago.
Category: Tax
Expert:  bigduckontax replied 4 years ago.
Hello, I'm Keith and happy to help you with your question.

ATED does not kick in unless the property was worth 2M on 1 April 1912.

If this does not cover you then please come back for more advice. Have a look at 'Annual tax on enveloped buildings - the basics' on the HMRC web site.
Customer: replied 4 years ago.

the property is greater than £2 million in value. i am aware that this is the threshold for the charge to apply. what i am not sure is whether the fact that i have beneficial ownership changes applicability of ATED.


Expert:  bigduckontax replied 4 years ago.
The building is owned by the company, thus ATED will be charged annually on the company, but not upon you personally. Your beneficial ownership does not come into the equation. ATED applies to companies, not individuals.
Customer: replied 4 years ago.

but I am the beneficial owner of the company and the only thing the company is doing is buying this property together with the financing. does that not change the analysis ?



Expert:  bigduckontax replied 4 years ago.
Not according to HMRC. The property is owned by the company and thus ATED applies. There are some reliefs, but non appear to arise in your case.