We are sure you will be aware of the Annual Tax on Enveloped Dwellings (ATED) legislation which was introduced on 1 April 2012. What you may not be aware of however is the intricacies of the reporting rules which may mean you need to act prior to the end of April 2016.
As a brief overview/recap, ATED is an annual tax payable mainly by companies that own UK residential property. You will need to complete an ATED return if your property:
- Is a dwelling – i.e. broadly where all or part of it is used, or could be used as a residence;
- Is in the UK;
- Was valued at more than £500,000 on 1 April 2016;
- Is owned completely or partly by a company, partnership where one of the partners is a company or a collective investment scheme – for example a unit trust or open ended investment vehicle.
As mentioned above, the deadline date for filing an ATED return and paying any tax that is due on any relevant property so held at 1 April 2016 is 30 April 2016.
There are relief and exemptions from the tax which may mean you don’t have to pay. However, it should be noted that these must be claimed by completing and submitting a Relief Declaration Return – relief is NOT given automatically.
You may be able to claim relief for your property if it is:
- let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner;
- open to the public for at least 28 days a year;
- being developed for resale by a property developer;
- owned by a property trader as the stock of the business for the sole purpose of resale;
- repossessed by a financial institution as a result of its business of lending money;
- being used by a trading business to provide living accommodation to certain qualifying employees;
- a farmhouse occupied by a farm worker or a former long-serving farm worker;
- owned by a registered provider of social housing;
It is likely the first bullet point above will be the main source of relief.
If you do need to pay the ATED, the chargeable amounts for the period 1 April 2016 to 31 March 2017 are as follows:
| Property value | Annual charge |
| More than £500,000 but not more than £1 million | £3,500 |
| More than £1 million but not more than £2 million | £7,000 |
| More than £2 million but not more than £5 million | £23,350 |
| More than £5 million but not more than £10 million | £54,450 |
| More than £10 million but not more than £20 million | £109,050 |
| More than £20 million | £218,200 |
We trust that the above is clear and enables you to assess whether an ATED liability arises, but if anything requires further clarification or you would like our assistance in completing the ATED returns please do not hesitate to contact a member of the WHA tax team.
