The UK Revenue (HMRC) has now released the draft ATED return. This confirms that details of the shareholders of a company, which is within the charge to the ATED, do not need to be included in the ATED return. The first ATED returns must be filed before 1 October 2013.
Annual Tax on Enveloped Dwellings
A new annual charge - 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 first ATED returns must be filed before 1 October 2013 with payment of the ATED due on 31 October 2013. An ATED return must be filed, by this date, for any residential property valued at over £2m on 1 April 2012 which is beneficially owned by a company, a partnership (with a corporate member) or a collective investment scheme. 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. It had been feared that HMRC would request details of the beneficial owners of property holding companies as part of the ATED compliance process. However, the draft ATED return, which has now been released by HMRC, does not require these details. One exception to this is where the company holds the property on bare trust and the beneficial owner of the property is itself within the charge to the ATED.
HMRC previously said that where the ATED is payable, HMRC are unlikely to need to know who the beneficial owners of the company are. However, where a relief is claimed, HMRC says that the names of the beneficiaries of the ownership structure may be required in the course of an enquiry where, for example, the owner of the property is a company and beneficiaries of a structure need to be disclosed to establish whether the occupier of the property (or persons entitled to occupy) is a 'non-qualifying individual' (as defined in the legislation) so that the relief is not in fact available.
Reliefs from the ATED
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 (or 'non-qualifying individual') is not permitted to occupy the property; or
- is open to the public.