Forbes Dawson Tax Bite: Annual tax on enveloped dwellings

Return due on 1 October 2013


  • There is a new annual tax charge (ATED) for UK residential property owned by ‘non-natural persons’ – typically offshore companies.
  • This applies for dwellings worth more than £2M.
  • Annual tax is charged as follows depending on property value.

Required Action

The following action is required for relevant offshore persons:

  1. Consider availability of reliefs (letting business/development business).
  2. Claim reliefs on return (available here).
  3. If there are no reliefs ensure realistic valuation is claimed to support tax due (see Figure 1 below)
  4. Submit return by 1 October 2013 to avoid penalties.
  5. Payment is then due by 31 October 2013
  6. Consider ‘de-enveloping strategies’ to mitigate future charges.

We are currently working on a number of cases involving high value residential property occupied by non UK domiciled or non UK resident individuals.

We are also able to prepare and submit the ATED tax returns although clearly the filing date is now imminent.

Figure 1 – Tax due based on Property Value


Property Value

Annual Tax 2013-14

£2,000,001 to £5,000,000


£5,000,001 to £10,000,000


£10,000,001 to £20,000,000


£20,000,001 and over





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