Finance Act 2013

Finance Act 2013

2013 CHAPTER 29

Introduction

Sections 94 – 174, Schedules 33, 34, 35: Annual Tax on Enveloped Dwellings

Details of the Sections

Section 116 – Dwelling in Grounds of another Dwelling

114. Subsection (1) and subsection (4) apply the annual tax on enveloped dwellings as if a “main dwelling” and an “associated dwelling” were one dwelling, if at the end of “the day in question” in a chargeable period certain conditions linking the dwellings are met.

115. Subsection (2) sets the conditions that need to be met: the properties must meet a common ownership condition, they must not have separate access from each other and the associated dwelling must stand in the gardens or grounds of the main dwelling. They must be separately occupied and enjoyed, as otherwise they will be part of the same dwelling (and section 115(2 would apply).

116. Subsection (3) defines common ownership for companies (subsection (3)(a)) as entitlement of the same or connected companies to the chargeable interests in each dwelling. Dwellings pass the common ownership test also if chargeable interests in each are held for the purposes of the same collective investment scheme (subsection (3)(b)).

117. Subsection (5) and (6) disapply subsection (4) if on the day in question either the main dwelling or the associated dwelling is relieved from the annual tax on enveloped dwellings or is a charitable company that is exempt from ATED because it is deemed not to meet the ownership condition.

118. Subsection (7) excludes public bodies or bodies established for national purposes from being connected companies.

119. Subsection (8) states that an interest held for the same collective investment scheme, includes an interest held by a person connected with the scheme.

120. Subsection (9) defines “separate access” for an associated dwelling as access direct from a road or on land over which the occupant has a right of way or other separate land interest.

121. Subsection (10) outlines the meaning of “garden or grounds”, “the person entitled to possession”, and “separately entitled” for the purpose of this section.