News & Events
Do you own a residential property in a company?…April 30th deadline
7th April 2022
Since 2012 Limited Companies are liable to prepare and submit an additional annual return and may be liable to an annual tax charge on high value residential properties they own.
This regime is known as Annual Tax on Enveloped Dwellings (“ATED”) and, from 2016/17 applies to any limited company which owns a residential property valued in excess of £500,000 (£500k per dwelling, not per portfolio) whether held for personal use, as an investment or stock.
The property should be valued as at 1 April 2022.
It is important to note that if you are involved in such things as property development or property investments, you will need to make a claim to get the relief.
ATED returns and relief claims need to be done at the start of the year. The filing deadlines for ATED returns (or relief returns) are:
- Where an interest is held as at 1 April 2022, a return must be filed by 30 April 2022.
- Where a new interest is acquired part way through the tax year, the return will need to be submitted within 30 days of acquisition.
- Where a newly constructed property is built, the return will need to be submitted within 90 days from when the property is complete (for Council Tax purposes), or occupied if earlier.
The annual tax charges for 1 April 2022 to 31 March 2023 are:
| Property Value |
Annual Tax Charge (£) |
|
| More Than (£) | Less Than (£) | |
| 500,000 | 1,000,000 | 3,800 |
| 1,000,000 | 2,000,000 | 7,700 |
| 2,000,000 | 5,000,000 | 26,050 |
| 5,000,000 | 10,000,000 | 60,900 |
| 10,000,000 | 20,000,000 | 122,250 |
| 20,000,000 | 244,750 | |
A number of reliefs are available to mitigate the aforementioned tax liabilities, specifically in respect of commercial property investors / developers. However, even where relief for the annual tax charge is available, the company is still required to complete and submit the relevant relief form on or before the above deadlines.
Additionally, the above regime also catches:
- Part interests where the value of the property as a whole exceeds £500k (i.e. even where the company only holds a 30% share).
- Leasehold interests valued in excess of £500k.
As such, it is important that you let us know as soon as possible if you currently own a high value property or, when you acquire / build such a property.