The Annual Tax on Enveloped Dwellings (ATED) applies from 1 April 2013 on UK residential properties valued at over £2m which are owned by companies, partnerships (with a corporate member) or collective investment schemes (UK or non-UK).
The ATED return and ATED payments must be paid by 30 April at the beginning of each ATED period. For the ATED period beginning 1 April 2014 (and for all future years) the return and payment will due by 30 April. For example, for the period 1 April 2014 to 31 March 2015, both the return and the payment are due by 30 April 2014. An ATED return must be filed, by this date, for any residential property valued at over £2m on 1 April 2012 (or acquired for more than £2m since then) which is beneficially owned by a company, a partnership (with a corporate member) or a collective investment scheme.
ATED rates are set annually in line with changes in the Consumer Prices index so you should ensure any liability is calculated using the correct rates of tax before filing the ATED return. The rates for the ATED period 2014/2015 will be published before 1 April 2014.
For the first year of ATED (1 April 2013 to 31 March 2014) transitional arrangements applied such that the return was due on or before 1 October 2013 with payment of the ATED due on 31 October 2013.
Relief from the ATED applies, subject to certain conditions, where a property:
- is let to third parties on a commercial basis; or
- is held as part of a property development business or a property trading business;
provided that a connected person ('non-qualifying individual') is not permitted to occupy the property.
However, an ATED return must be filed even where a relief applies and no ATED is payable.
Where the ATED is payable on a property held by a company it is the company that is liable to the ATED and details of the shareholders of the company do not need to be included in the ATED return.