ATED

ATED is a tax paid each year by companies (or other corporate structures) on high value residential property (dwellings). 

In cases where a dwelling is owned by a company, a partnership with a corporate member or other collective investment vehicles, the dwelling is said to be 'enveloped' because the ownership sits within a corporate 'wrapper' or 'envelope'. 

Corporate entities that hold UK residential properties, which are each valued over £500k, are affected. 

Corporate entities that have a property portfolio which exceeds this threshold, but no single dwelling is valued above the threshold at any relevant time, will not be liable to ATED. 

ATED is reported to HM Revenue & Customs (HMRC) via an ATED tax return. An ATED tax return will need to be completed and payment made by the 30th of April each year. ATED periods run from the 1st of April to the 31st of March the following year. An ATED return will need to be submitted within 30 days of acquisition for properties acquired after the 1st of April. 

ATED payable will be calculated by reference to the number of days in the year the property falls within ATED. If the property is only owned for part of a year, or if the use of the property changes so that it moves into or out of ATED, the ATED charge is pro-rated. 

Properties must be revalued every five years.   

There are a number of exemptions from ATED, such as charitable companies using the dwelling for charitable purposes, which means a return will not need to be filed. 

There are also reliefs that may eliminate the tax charge but a return will need to be completed and submitted each year to claim the relief. Relief is available in a number of different circumstances, such as when the property is let to a third party on a commercial basis, is being developed for resale, or is open to the public for at least 28 days a year. 

Please contact us to find out how the above applies to your circumstances, how you can reduce your tax liabilities, and maximise your tax efficiency.