Clock ticking to submit new ATED returns to HMRC


If you own an interest in a UK residential property held completely or partly through:

• A company; or
• another corporate body; or
• a partnership, where one of the partners is a company; or
• a collective investment vehicle, for example a unit trust or an open ended investment company (OEIC)

then you need to be aware of the additional tax rules known as ATED.

This stands for Annual Tax on Enveloped Dwellings and applies to properties valued at £1 million (reduced to £500,000 from 1st April 2016), or above as at 1st April 2012. The lowering of the values will particularly affect properties in the South East of England. Property will be revalued for ATED purposes 1st April 2017 so even if a property is not currently caught, it may be on revaluation.

Those properties caught by the rules will be required to complete an ATED tax return and pay over the tax due annually.

There are exemptions for properties which are:

• Dwellings acquired and held for the purpose of property development or trading, carried out on a commercial basis and not occupied at any time by a connected person.

• Dwellings acquired and held for the purpose of rental to third parties on a commercial basis.

• Properties open to the public and run as a trade.

• Dwellings held for the charitable purposes of a charity.

However, exemption must be claimed on completed ATED tax returns so the requirement to file still applies.
ATED returns for properties valued at of £1 million to £2 million are due for submission no later than 1st October2015 and then annually on the same due date for property valued in excess of £2 million of 30th April.
Tax on properties valued £1million to £2 million is due 31st October 2015. The tax due date for properties over £2 million is 30th April.
Prior registration is needed so if you are likely to need to take action, please get in touch now to check your position and ensure you meet the deadlines.