Annual tax on enveloped dwellings and stamp duty land tax interactions

The Fiddler on the Roof is a metaphor in the story of Tevye the milkman with the fiddler in question in a precarious and uncertain position. It’s also a precarious position to take to assume that the annual tax on enveloped dwellings (ATED) and ATED-related stamp duty land tax (SDLT) work in identical ways as they derive from different parts of the tax code.

This article contains examples of scenarios involving joint purchase of a dwelling by a company and an individual which illustrate points where the two meet on residential property.

Background

SDLT is a tax on acquisition with the rules found mainly within FA 2003 s 42 to s 123. ATED is an annual property tax but is also a tax on acquisition and sale via ‘ATED-related SDLT’ and ‘ATED-related CGT’. Unlike SDLT ATED is solely a tax on residential ‘dwellings’ held wholly...