TaxSource Total

Here you can access summary of the key current tax developments in Ireland, the UK and internationally as reported by Chartered Accountants Ireland

The report of key tax developments are displayed per year, per month, by Ireland, the UK or International and by report title

Annual tax on enveloped dwellings (ATED)

HMRC have asked us to share the below briefing note on the ATED.

“Annual Tax on Enveloped Dwellings (ATED)

  • Whilst most residential properties are owned by individuals directly, some properties are owned by a company or other corporate entity. This form of ownership is described as “enveloping”.
  • ATED is an annual tax charged on a company, partnership (where one of the members is a company) or collective investment vehicles that own UK residential property valued above a certain amount.
  • The amount of ATED due is worked out using a banding system based on the value of the property.
  • The ATED chargeable period runs from 1 April to 31 March. ATED returns must normally be filed by 30 April in the year of charge.
  • There are a number of reliefs which may reduce the charge to nil. All reliefs must be claimed in a return.
  • There are also exemptions from ATED which may mean a return does not need to be completed.
  • FA 2014 introduced a lower-entry threshold at which properties come within the scope of ATED. This was lowered from £2m to £500,000 and the reduction is being introduced over 2 chargeable periods.
  • From 1 April 2015 a new band was introduced that applies to enveloped dwellings worth more than £1m but less than £2m. The annual charge for this new band is £7,00.
  • For those falling within this new band, and for 2015/16 only, returns must be filed by 1 October 2015 with payment required by 31 October 2015.
  • For later years the normal filing/payment dates will apply.
  • From 1 April 2016 a further new band will apply to residential property worth more than £500,000 but less than £1m. The annual charge for this band will be £3,500.

ATED Liability Return

If you have any liability to ATED for the 2015/16 period you should use the existing ATED return.

ATED Relief Declaration Return

A new, simplified Relief Declaration Return has been released on the HMRC website.

If you own a property or properties eligible to a relief and have no ATED liability for the 2015/16 chargeable period, you can use this return to claim relief. No property details are required and you only need to file one return for each relief code being claimed.

For 2015/2016 only, the filing date for those eligible to file this new type of Relief Declaration Return is 1 October 2015.

ATED Developments

Budget 2014 announced measures to simplify the filing obligations for businesses holding properties eligible to a relief, and which as a result have no ATED liability. Legislation is included in Finance Act 2015 to that effect.

HMRC is developing a new on-line digital service for ATED so that our customers are more easily able to file, pay and make changes in respect of their ATED obligations in a single place. We will update our ATED pages on Gov.Uk when the new ATED on line digital service is available.

More detailed guidance about ATED can be found at: https://www.gov.uk/government/publications/stld-annual-tax-on-enveloped-dwellings-ated”

END OF BRIEFING NOTE