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Annual tax on enveloped dwellings

28th February 2017

Annual Tax on Enveloped Dwellings (‘ATED’)

You may have heard of the ATED regime which applies to all companies which own residential property in excess of the threshold (currently £500,000).

If your company owns residential property and the value is likely to exceed the £500,000 ATED threshold, then the company may be liable for an annual tax charge on the property. At present for properties valued between £500,000 - £1 million the charge is £3,500 per annum.

Relief From Charge
There are a number of reliefs available which may apply, but these reliefs need to be claimed in the return due by 30 April.

There are heavy penalties which apply to companies that should have made a return and fail to do so, so it is important to assess the position well in advance of the filing date.

Valuation
Under the ATED regime there is a requirement to revalue properties periodically. The next required revaluation date is 1 April 2017. You should therefore ensure that any residential properties are revalued as at this date, as it could mean that additional properties are brought within the scope of the regime, or existing properties fall within a different chargeable band.

Next Steps
If you would like advice on whether ATED is likely to apply to your company, please contact your Wise and Co Partner or a member of the tax team.

 

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