Autumn Statement 2014: Annual tax on enveloped dwellings set to rise

At present certain non-natural persons holding high value residential property pay an annual tax charge (the ‘ATED’ charge).

The government intends to increase the charge by 50% above inflation for residential properties worth more than £2 million.

Property Value (£) Annual charge in 2014/15 Annual charge in 2015/16
1m – 2m £nil £7,000
2m – 5m £15,400 £23,350
5m – 10m £35,900 £54,450
10m – 20m £71,850 £109,050
20m + £143,750 £218,200


Additionally, from 2016/17, there will be a £3,500 charge on enveloped properties worth between £0.5m and £1m.

Increasing the tax charges so soon after the introduction of the ATED charge creates further uncertainty to those investing in UK property.

No doubt, many individuals will look to ‘de-envelope’ UK property to avoid these charges.