SDLT and ATED update - use of a residential property under the ‘Homes for Ukraine' Scheme
SDLT and ATED update - use of a residential property under the ‘Homes for Ukraine' Scheme
HMRC has confirmed that the use of a residential property under the ‘Homes for Ukraine’ Scheme should not have any adverse SDLT or ATED implications for companies.
SDLT
Where a company (or other 'non-natural person') buys a residential property costing more than £500k, SDLT is charged on the full amount at the rate of 15%. There is a relief from the 15% rate where the property will be used for certain purposes, eg within a property rental business.
There was some concern that the use of a residential property to house refugees under the Scheme may have resulted in the withdrawal of the reliefs from the 15% rate of SDLT. HMRC's announcement confirms that the reliefs should continue to be available.
ATED
Where a company holds such a property, it may also be subject to an annual charge under the ATED rules, but there are again certain reliefs (eg where the property is let to a third party on a commercial basis).
HMRC has confirmed that relief from ATED should also be available while a residential property is being used under the ‘Homes for Ukraine’ Scheme.
For further information or assistance, please contact Malcolm Pengelly.