What landlords need to know about Annual Tax on Enveloped Dwellings (ATED)
Do you own residential property that is valued close to or over £500k? If that is the case, you need to consider fixed ATED revaluation date. Click here if you would like to discuss an ATED filing.
Background
The Annual Tax on Enveloped Dwellings (ATED) regime came into force on 1 April 2013 in respect of UK residential properties owned by companies or corporate partnerships that were worth over £2million. It was then extended to properties worth over £1million from 2015 and to properties worth more than £500,000 from 2016.
The amount of the tax charge depends on the value of the property and now ranges from £3,800 up to a maximum of £244,750 across six bands of value determined by reference to a property’s value on 1 April 2017, or its actual cost if acquired after that date.
Considerations
The filing and payment date is 30 April each year. In contrast to most other taxes, ATED returns need to be submitted at the beginning of each annual period and not following the end of the period.
ATED returns or relief declaration returns for 2022/23 should be submitted between 1 April 2022 and 30 April 2022 with any tax due paid on, or before, 30 April 2022.
It should be noted, when you purchase a property that falls within the ATED regime, the return will need to be prepared and submitted online to HMRC within 30 days.
Exemptions
There are a number of exemptions from the charge covering property rental businesses, developers, and dealers which must be claimed via an annual nil return. Failure to submit such a claim in good time will unfortunately expose the company to penalties.
What do you need to do?
For this reporting period, the value is determined by the market value of the property as of 1 April 2022, or its original cost if acquired after this date. This means all properties must be revalued by 1 April 2022 and this value is the one which will be used for a specific property for the next 5 years.
Please do get in touch for a free consultation here if you would like to discuss an ATED filing.
