As part of ‘L-day 2022’, HMRC has published a policy paper and draft legislation covering temporary reliefs from the Annual Tax on Enveloped Dwellings (ATED) charge and the 15% Stamp Duty Land Tax (SDLT) rate, where a dwelling is made available under the Homes for Ukraine Sponsorship Scheme. This also deals with making payments by the government to those taking in refugees tax-free.

The scheme was introduced in March 2022 and allows people living in the UK to sponsor a named Ukrainian national or family to come to live in the UK with them, providing they have suitable accommodation to offer.

  • The annual ATED charge applies to residential properties (dwellings) valued over £500,000 which are owned by non-natural persons such as companies and which are not either let commercially or used in a property trade.
  • The 15% SDLT charge applies where non-natural persons acquire dwellings for more than £500,000 which are not used for property rental businesses, farmhouses, or property made available to the public or occupied by employees.

The new rules will ensure that:

  • Those non-natural persons who qualify for existing reliefs from the ATED charge and exemption from the 15% rate of SDLT can continue to claim those reliefs and exemptions while their properties are being used to house Ukrainians under the scheme.
  • Properties that do not currently qualify for relief from ATED will be entitled to relief from the date of actual occupation of the dwelling by refugees under the scheme.
  • Dwellings purchased for a purpose that would otherwise be a relievable purpose will qualify for relief from the 15% rate of SDLT where the intention is that the property will be temporarily available to refugees under the scheme.

The ATED relief takes effect from 1 April 2022 and the SDLT relief for transactions with an effective date on or after 31 March 2022.

In addition, the draft legislation provides that individuals, companies and other organisations who sponsor Ukrainian refugees under the scheme and receive a ‘Thank you’ payment from the government, will not have to pay income or Corporation Tax on those payments.

  • ‘Thank you’ payments are currently capped at £350 per month for up to 12 months.
  • The tax exemption is retrospective to 14 March 2022.

Useful guides on this topic

SDLT: Residential property higher rates
What Stamp Duty Land Tax (SDLT) rate applies for the purchase of a second home? What is the SDLT higher rate? Are there any reliefs from the SDLT higher rate?

Annual Tax on Enveloped Dwellings (ATED)
What is the Annual Tax on Enveloped Dwellings (ATED)? Who does ATED apply to? What relief is available and how is it claimed? What are the ATED return filing dates?

External link

HMRC Policy paper and draft legislation 

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