Don’t dwell on your ATED obligations

With only just under 6 months until the 2019/2020 ATED return filing deadline of 30^th April 2019. It may be an appropriate time to consider whether your limited company may be obliged to submit an ATED return.

The annual tax on enveloped dwellings (ATED) applies to companies which own an interest in a residential property which exceeds the value of £500,000. It was originally brought in to reduce any tax advantages from holding high value homes within a limited company.

But with recent reductions to the threshold to £500,000 and the valuation date for which ATED is assessed on being brought forward to the 1^st April 2017, there has been more properties being caught within the requirement to submit a return.

The standard ATED return is completed in advance of the year during April. However, some limited companies which have not filed a return previously may not be aware that if a residential property has been purchased between 1^st April 2018 – 31^st March 2019 which exceeded the £500,000 threshold then an ATED return will be due to HMRC within 30 days of purchase (90 days for the construction of a newly built dwelling).

If your limited company or property does not meet certain relief criteria, then your limited company will be due to pay the ATED charge on the same day as the filing deadline. This charge begins at £3,600 for properties valued between £500,000 and £1,000,000.

For those who have been used to submitting an ATED return on a yearly basis and have already filed a return then this covers multiple properties and the same relief for the whole period.

For HMRC’s technical guidance on ATED – https://www.gov.uk/government/publications/annual-tax-on-enveloped-dwellings-technical-guidance

Should you need any assistance in completing an ATED return for your company or whether your company is obligated to complete a return then speak to your office contact.

Disclaimer - All information in this post was correct at time of writing.