Annual Tax On Enveloped Dwellings (ATED)

Properties affected?

·         Residential properties in the UK owned by a company, or a partnership with a corporate member.

·         If the value of property on 1 April 2012 (or on acquisition, if later) is above the threshold value.

·         Each property is compared individually with the threshold value, rather than the total value all the properties owned.

Filing of ATED returns and payment of tax

·           A separate return is required for each property that falls within the scope of ATED, even if reliefs apply.

·           The ATED reporting period runs from 1 April to 31 March.

·           Normally, the ATED return has to be filed and the tax paid between 1 April and 30 April in the return period.  Therefore, for the 2015-16 ATED period the deadline is 30 April 2015.

·           In the year in which an ATED property is acquired, the return and payment are due within 30 days if purchased, or 90 days if the property is newly built.

Value threshold

·           For the 2013-14 and 2014-15 periods, the threshold was £2 million.

·           For 2015-16, this has been lowered to £1 million.

·           Where a property is valued between £1m and £2mm, the return and payment for 2015-16 are due by 31 October 2015, with the usual deadline thereafter.

·           For 2016-17 onwards, the threshold is reduced to £0.5 million.  The government has not yet announced whether there will be a similar extension of the deadline in the first year.

Revaluation

·           As noted above, you need to consider the value at 1 April 2012 or on acquisition if later.

·           From 2018-19 the value at 1 April 2017 will be used, with further revaluations every five years.

Tax payable?

·           The tax depends upon which band the property’s value falls into.  The bands are £1m to £2m; £2m to £5m; £5m to £10m; £10m to £20m; and over £20m.

·           Within each band the tax is a fixed amount (not a percentage of the value), which increases each year.

Reliefs

·         100% relief from ATED is available for a property if it is:

A)     Let to a third party on a commercial basis, or part of a property developer’s trade, and isn’t at any time, occupied (or available for occupation) by anyone connected with the owner; or

B)      For the use of the company’s employees, subject to certain conditions; or

C)      A farmhouse, provided it is occupied by a qualifying farmworker who farms the associated farmland, a former long-serving farm worker, or their surviving spouse or civil partner.

 

·         The relief has to be claimed on an ATED form each year.

      ·         Previously, a separate form had to be completed to claim the relief for each property.