Commentary

B6.722 ATED—interests held by connected persons

Business tax
Business tax | Commentary

B6.722 ATED—interests held by connected persons

Business tax | Commentary

B6.722 ATED—interests held by connected persons

Where on any day ('the relevant day') entitlements to separate SDIs in the same dwelling are held by connected persons (eg two companies holding separate interests in the same dwelling where both companies are wholly owned by another person), the general rule is that ATED applies as if each is entitled to the other person's single-dwelling interest as well as their own1. The purpose of this rule is to prevent the avoidance of ATED by a company transferring part of the value of an SDI to a connected person so that neither person holds an interest of sufficient value to fall within the scope of ATED. The definition of 'Connected persons for ATED purposes' is discussed at B6.703.

Example

Property Unit Trust was granted a 10-year lease over a dwelling by Mr Z who is entitled to 50% or more of the income or assets of the Property Unit Trust. Separately Mr Z holds the freehold interest in his own name. At the valuation date the lease and the freehold have values of — the remaining part of the

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