Annual Tax on Enveloped Dwellings: Be prepared

Annual Tax on Enveloped Dwellings: Be prepared

If you have a residential property, which is valued at more than £2,000,000 and is owned by a corporate entity, you should submit a tax return by 1st October 2013.

According to HMRC, the Annual Tax on Enveloped Dwellings (ATED) is a tax payable by companies (and other corporate structures), collective investment vehicles and partnerships that own high value residential property (a ‘dwelling’). This new return came into effect from 1 April 2013.

ATED applies to residential properties (‘dwellings’) that are physically located in the UK and used for residential or mixed purposes. This tax also includes gardens and grounds and any building within them. If a property consists of a number of flats, each flat will usually be valued separately.

For those companies that possess a historic house, there is an opportunity to claim a relief that may reduce its ATED charge to nil. But to get this relief the property should be open to the public for at least 28 days per annum.

Please see HMRC rate bands below:

Property Value

Annual Tax 2013-14

£2,000,001 to £5,000,000 £15,000
£5,000,001 to £10,000,000 £35,000
£10,000,001 to £20,000,000 £70,000
£20,000,001 and over £140,000

Please be informed that the return for the 12 month ATED period beginning on 1 April 2013 must be completed online by 1 October 2013. Or, if sent in paper form, HMRC should receive it by 1 October 2013.

Should you have any questions or need professional advice, please contact our team

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