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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:

  1. Where an interest is held as at 1 April 2022, a return must be filed by 30 April 2022.
  2. Where a new interest is acquired part way through the tax year, the return will need to be submitted within 30 days of acquisition.
  3. 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:

 

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.

 

Registered with the Institute of Chartered Accountants in England & Wales to carry on audit work in the UK, regulated for a range of investment business activities and licensed to carry out the reserved legal activity of non-contentious probate in England and Wales. Registered with the Institute of Taxation as a firm of Chartered Tax Advisers. . Associate Directors of the firm are not Directors of The Rowleys Partnership Limited and are not subject to the obligations and responsibilities of Directors within Part 10 of the Companies Act 2006.  Any reference to an individual with the job title “Partner” refers to someone who is a Director of The Rowleys Partnership Limited and also a registered member of Rowleys Group LLP (registered no. OC306056)  A list of Directors and Members are available at Companies House. Details of our audit registration can be viewed at www.auditregister.org.uk and details of our probate registration can be viewed at www.icaew.com/probate, both under reference number C001486455. View our Legal and Privacy Policy.