ATED RETURNS AND REVALUATIONS DUE

Paul Crichton

ATED RETURNS AND REVALUATIONS DUE


The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2012 and is charged where certain residential properties are owned within a corporate structure. This tax catches UK properties owned by wealthy oligarchs via offshore companies and not applies to UK resident companies. Originally the charge only applied where the value of the property exceeded £2 million but that threshold has been subsequently reduced to £500,000. The charge for 2022/23 starts at £3,800 and rises to £244,750 when the property value is more than £20 million.

Properties need to be revalued every five years and the latest valuation date was 1 April 2022. With significant increases in property values in recent years, this may mean that more companies may be required to complete an ATED return.

There are numerous exemptions and reliefs from ATED, but companies still need to submit an ATED Relief Declaration Return.

MAIN ATED RELIEFS

The main situations where there is a relief from ATED are where the property is:

  • let to a third party on a commercial basis
  • being developed for resale by a property developer
  • owned by a property trader as the stock of the business for the sole purpose of resale
  • a farmhouse occupied by a farm worker or a former long-serving farm worker

POSSIBLE CHANGES TO SDLT MULTIPLE DWELLINGS RELIEF

HMRC has been consulting on changes to the relief from stamp duty land tax (SDLT) when two or more properties are acquired at the same time. This indicates that a change in the rules is imminent, and purchasers should take advantage while the relief continues to apply.

Currently, where at least two dwellings are purchased in a single transaction, or as part of a series of linked transactions between the same vendor and purchaser, the purchaser can choose to have the rate of SDLT determined by the average value of the dwellings purchased, rather than their combined value. Purchasers can therefore benefit from multiple nil-rate and lower percentage bandings, significantly reducing the amount of SDLT payable. Multiple dwellings relief doesn’t apply automatically; it must be claimed in a land transaction return and your solicitor may not be aware of this important relief.