Date posted: 12th Apr 2019
Annual Tax on Enveloped Dwellings (“ATED”) has been with us for several years now and has a mandatory filing requirement even if no ATED charge arises due to one of the reliefs being available.
When reviewing your property portfolio ahead of the filing deadline you should consider the following:
The ATED rules impose an annual charge where UK residential property, valued at more than £500,000, is owned by a Non-Natural Person (“NNP”). An NNP includes both UK and non-resident companies as well as certain other corporate entities.
The ATED charge is payable based on the value (as at 1 April 2017) of each individual property owned by the NNP. The 2019/20 rates range from £3,650 for a property valued between £500,000 and £1 million up to £232,350 for a property valued above £20 million.
ATED returns are submitted in April each year in advance of the fiscal year. That is, for 2019/2020, ATED returns and any ATED charge must be submitted and paid over to HMRC by 30 April 2019 for any properties held by the NNP at the start of the tax year, 1 April 2019. An ATED return must be made for each property for which the ATED charge is payable, thus an NNP may have to submit several returns.
If your NNP acquires a UK dwelling during the year worth more than £500,000 or incurs expenditure on a property it already owns, which results in its value increasing above £500,000, these properties will also be caught by the ATED rules; ATED returns and partial ATED charges can apply and it is likely a return will be required within 30 days of acquisition. The submission date can be extended if an existing property’s value increases above the aforementioned threshold.
Similarly, if your NNP disposes of a property that was the subject of an ATED charge, an amended return will be required during the year to reclaim part of the ATED charge already paid.
There are several reliefs available that can eliminate or reduce the ATED charge. If a relief is available it must be claimed via an online submission within the same timescales as the ATED return.
In summary, all companies owning residential property worth more than £500k must submit an ATED return or a claim for relief.
If you have any queries about reporting the ATED charge, claiming reliefs or any other aspect please call Elizabeth Layfield on 01325 349700.