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COVID-19: As a firm, we are heeding the Government’s advice, and the majority of our staff are now working from home.

Our offices are open to clients and visitors if you need to drop off or pick up records. Please telephone ahead to arrange a date and time so we can let our receptionists know.

It is business as usual at Lang Bennetts, so please let us know if you require our assistance. We are picking up e-mails and all our staff can be contacted via the usual office numbers.

What our clients say...

The support Lang Bennetts have given us over the last 13 years has helped our business in a number of ways.

"They have also helped with new acquisitions that has allowed us to grow and expand our branch network across Cornwall, Devon, Dorset, Bristol, Somerset and Wiltshire."

Mark Mitchell, Cornwall Glass & Glazing

The mansion tax debate continues...

The top end of the residential property market has been depressed by high rates of stamp duty land tax and may yet suffer from the annual ‘mansion tax’ proposed by both Labour and the Liberal Democrats if they were to come to power after the May election.

Leading Labour politicians have provided details of their current proposals, which seem to be popular with much of the electorate, although probably not those directly affected. The proposed tax would target high-value properties, more than 95% of which are situated in London and the south east of England. The suggested starting threshold of £2 million would affect around 100,000 homes. In contrast, Scotland and Wales combined currently have fewer than 1,000 homes worth more than £2 million.

The current suggested structure is a simple banded system possibly based around the annual tax on enveloped dwellings (ATED) which was introduced in 2013. ATED currently applies where property valued at over £2 million is owned within a corporate ‘wrapper’ or ‘envelope’, with higher annual charges applying for property values exceeding £5 million, £10 million and £20 million.

Details are lacking, but Labour has said that the annual mansion tax charge would be £3,000 for properties valued between £2 million and £3 million, with higher bands possibly set at £5 million and £10 million. The £2 million band would rise broadly in line with property values. Overseas owners of second homes in the UK might be required to pay proportionally more. Homeowners would be expected to make an assessment of their property’s value for submission to HMRC. This would save the cost of an independent valuation, but it could lead to penalties being charged if HMRC were to dispute a valuation.

Labour is proposing a facility to help homeowners on a relatively low income – i.e. probably basic rate taxpayers. They may be able to defer paying the tax charge until the sale of their properties or earlier death. It is too early to speculate about what tax planning, if any, might be effective. One approach might be to avoid the purchase of a single expensive main residence, and instead buy a less costly property and use the spare cash for a holiday home.

In this edition

Advisory fuel rates reflect fall in oil prices
Coded out debt
Restrictive covenants on employment contracts
Summer 2015
The mansion tax debate continues
VAT and new rules for digital services

This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The newsletter represents our understanding of law and HM Revenue & Customs practice as at 5 January 2015.