Annual Tax on Enveloped Dwellings

ATED is an annual tax on high value properties held within a corporate vehicle.  This means that it is relevant not only to companies, but also to partnerships with one or more corporate members and to collective investment schemes.

When it was introduced, ATED targeted residential properties with a market value in excess of £2m at the later of acquisition and 1 April 2012.  These limits have been gradually reduced and ATED now catches dwellings with a market value in excess of £500k.  Properties are required to be revalued every 5 years with the next revaluation point being 1 April 2017.  Rising market prices are likely to see significantly more properties within the ATED net from this date.

The ATED period runs from 1 April to 31 March each year.  Returns must be filed and any tax due must be paid by the 30 April falling during the ATED period.  A company may be required to file multiple returns if it owns more than one ATED property.  In-year acquisitions, disposals, conversions or changes in the use of a property can all trigger an obligation to file additional returns (and possibly pay more tax) within strict time limits.  HMRC are enforcing late filing penalties, even where no tax is due.

There are a number of reliefs from ATED which mean that the ATED charge is reduced or removed.  These apply where a property is used for business purposes, although not all business purposes will meet the conditions for relief.  Reliefs must be claimed on an ATED relief return.

Our specialists are able to help you identify and comply with your ATED obligations.  We are able to assist you with the following:

  • Assessing whether you are within ATED
  • Identifying whether you are eligible for relief
  • Ensuring that you file your returns and pay any tax due on time
  • Advising on possible restructuring to take the property out of ATED
  • Advising on tax efficient structures for acquiring UK property

To discuss how we can help you, please get in touch with our ATED team or send us an online enquiry

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