Date posted: 22nd Mar 2021
As discussed in prior years, we are now entering the annual reporting period for this Annual Tax on Enveloped Dwellings (“ATED”) charge which has a tax, and reporting, period which differs from other taxes.
ATED returns are submitted in April each year in advance of the following year ended 31 March. So, for the year to 31 March 2022, ATED returns and any ATED charge, must be submitted and paid over to HMRC by 30 April 2021 for any properties held by a Non Natural Person (NNP) at the start of the tax year, 1 April 2021. 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.
ATED has a mandatory filing requirement even if no ATED charge arises due to one of the reliefs being available.
Please review your property portfolio ahead of the filing deadline and consider the following:
The rules impose an annual charge where UK residential property, valued at more than £500,000, is owned by an 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.
Changes to your property portfolio during the year to 31 March 2022 should also be considered in the light of the ATED rules as follows:
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; returns and partial 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 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 charge, claiming reliefs or any other aspect please contact Elizabeth Layfield on 01325 349700.