ATED – Does it apply to your company?

One of the administrative burdens relating to the attack on UK residential properties is rearing its head this month – the need to file an Annual Tax on Enveloped Dwellings (‘ATED’) return.

ATED affects UK residential properties owned by a non-natural person; in most cases this means where it is owned by a company but it also applies to LLPs with a corporate member. This applies to both UK and non-UK companies.

There is a need for such companies to file a return by 30 April 2016 to disclose any properties held where the value exceeded £500,000 as at 1 April 2012, or the date of acquisition, if later. If the value now exceeds £500,000 it is important to obtain a valuation as at 1 April 2012 to ascertain whether it falls within these rules.

An annual tax charge may then be payable, with the minimum charge of £3,500 for properties valued at more than £500,000, up to £218,200 for properties valued at more than £20m! If the company operates a genuine property rental business, or acts as a property developer or dealer, a relief will be granted but only if it is claimed on the ATED return.

Therefore where any UK residential property valued at over £500,000 is held within a company, a tax return will need to be submitted before 30 April 2016 to avoid penalties in respect of both late filing and tax charges. The penalties are in line with self-assessment penalties meaning daily penalties apply where the return is over three month’s late.

If you need any help please contact your usual Forbes Dawson representative or call the main office line at 0161 927 9277.

 

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