More firms exposed to ATED regime

If your limited company owns, acquires or constructs residential property then you could be required to file a return and possibly pay tax under the Annual Tax on Enveloped Dwellings (ATED) regime for each relevant property.

There are complex rules involved, particularly where a controlling shareholder occupies a dwelling, or when newly constructed dwellings are first registered for Council Tax. Furthermore, with the lowest valuation threshold currently set at £500,000, many residential properties could now be caught.

Significant penalties could be charged, even where no tax is due (e.g. most property developers), if a return is required but not filed on time. It’s also important to note that whilst there is an annual filing deadline of 30 April for returns, there are much tighter filing deadlines if your company does something, such as acquires a property or registers a constructed property for Council Tax, between 1 April and 31 March. These ‘in year’ deadlines are typically 30 or 90 days, depending on the trigger event, and so if you are in any doubt, please contact us for advice.

To find out more, please contact Jon Miles.