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Annual Tax on Enveloped Dwellings (ATED) filing window

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With the filing window for returns for the Annual Tax on Enveloped Dwellings (ATED) around the corner, BHP Tax Manager Pete Earley takes a look at what this could mean for you.

If you hold UK residential property through a limited company and the property is valued above £500,000, you’re likely to fall under the Annual Tax on Enveloped Dwellings (ATED) regime.

This means your company could be liable to pay an annual tax charge unless you qualify for certain reliefs.

Do I have to do anything?

If the owner of a UK residential property is:

  • a company
  • a partnership of which a partner is a company, or
  • a collective investment scheme

and the value of this property exceeds £500,000, you will be required to make an annual declaration to HMRC under ATED.

When do I need to do this?

Any ATED disclosures must be made to HMRC between 1 April and 30 April each year. Therefore, there’s only a very short window of opportunity to avoid late filing penalties.

How much ATED will I have to pay?

The annual charge is determined by the value of the property, and the higher the value, the higher the charge.

Are there any exemptions or reliefs?

Yes, if the property falls within certain criteria, such as being commercially let or held for development or resale, relief may be able to be claimed from paying the ATED charge, leaving only the disclosure to be made to HMRC during April.

What happens if I purchase a UK residential property part way through the year?

Should ATED apply to a new purchase, HMRC allow a 30-day window from acquisition to inform them that ATED applies and either settle the charge or claim the relevant relief.

How can BHP help?

BHP has a team specialising in all aspects of ATED and can assist you with your disclosure requirements.  Please speak to your BHP contact who can put you in touch with one of the Tax Team for further assistance.