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Markel Tax

12 Feb 2020

Reminder of ATED deadline

The Annual Tax on Enveloped Dwellings (ATED) is an annual charge that applies to UK residential dwellings with a value over £500k, that are completely or partly owned by a company, partnership with at least one company member or a collective investment scheme.

The amount of ATED payable is calculated using a banding system based on the value of the dwelling, with the charge starting at £3,650 for dwellings between £500k and £1 million and increasing to £232,350 for dwellings valued at over £20 million.

The band is based on the value of the dwelling on the later of either, the date the dwelling is acquired or, certain pre-set valuation dates. Dwellings within ATED are subject to mandatory revaluations every five years starting with the next valuation date being 1 April 2022. Valuations may be required at certain other occasions.

There are a number of reliefs and exemptions from the ATED regime, most notably where the dwelling is let to a third party on a commercial basis and isn’t at any time occupied by anyone connected with the owner. It is important to note that these reliefs have to be claimed each year.

For dwellings owned at the start of a chargeable period, beginning on 1 April each year, the reporting and payment deadline for the ATED charge is the 30 days from the start of the period. For the tax year 2020/21 the deadline is 30 April 2020, however the return cannot be submitted before 1 April 2020, although returns can be completed online from the middle of March ready for submission when the reporting window opens. The deadline for submitting the ATED relief declaration return for claiming relief from ATED is also 30 April 2020.

Agents can submit ATED returns on behalf of their clients, however it is important that they ensure they have access to the online service before 1 April 2020 to avoid delays when the filing period opens
Advisers will need to confirm they are registered as agents for their clients ahead of the filing deadline and which properties are within the ATED charge and the reliefs or exemptions applicable to each.

Next article in series

12 Feb 2020

Non-UK resident companies carrying on UK property business

The rental profits of UK property businesses generated by non-UK resident companies currently fall within the UK Income tax (IT) regime, with profits charged at a rate of 20%. However, from 6 April 2020, such profits will fall within the UK Corporation Tax (CT) regime, which is currently charged at a rate of 19%.