Posted by James Pearson on 25 Nov 2014

Relief for Annual Tax on Enveloped Dwellings

The Annual Tax on Enveloped Dwellings (ATED) was introduced from 1 April 2013 and requires certain non-natural persons, such as companies, to pay an annual charge if they own UK residential property and the property was worth £2 million or over as at 1 April 2012 or at acquisition if later. This minimum value is reducing to £1 million from 1 April 2015 and £500,000 from 1 April 2016.

Reliefs are available in some cases to reduce or entirely remove the charge, for example, relief may be available where the property is let out to unconnected parties on a commercial basis or is part of a property development business.

ATED is self-assessed and returns must be submitted to HMRC for each financial year in which a property is subject to ATED, even if no tax is payable because the property falls into a relief category. If you fail to comply HMRC may charge interest and penalties and in addition, the relief, exempting the property from ATED, may be lost.

Returns for a financial year are due by the 30 April that falls at the start of that financial year meaning that, unlike most other tax returns, you have to file before the period being reported on has ended.

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