Essential tax relief details for property owners affected by ATED

In a recent blog, we outlined the changes which were announced in the March 2014 Budget relating to ATED (Annual Tax on Enveloped Dwellings). This article covers the administrative aspects and the reliefs and exemptions that are available. 

What is the administrative process for completing ATED returns?

An ATED period lasts for one year and begins on 1 April each year. If a property falls within the scope of ATED, you must complete and send HMRC an ATED return by 30 April at the beginning of each ATED period. So for the ATED period beginning on 1 April 2014 and ending on 31 March 2015, both the return and the payment were due on 30 April 2014.

If a property first falls within ATED on a date after 1 April in an ATED period, the return and payment are due within 30 days if the property is purchased, or 90 days if the property is newly built.

Are there any tax reliefs available for properties affected by ATED?

There are reliefs available that might mean no ATED is payable. If you qualify, you must complete an ATED return and claim the appropriate relief.

A residential property might get relief from ATED if it broadly satisfies any of the following criteria and provided it isn’t occupied or available for occupation at any time by the owner or anyone connected with the owner:

• It is part of a property developer’s trade; is acquired as part of a property development business and was purchased with the intention to re-develop it and sell it on;
• It is let to a third party on a commercial basis;
• It is open to the public for at least 25 days per annum;
• It is part of a property trading business;
• It is acquired for the use of employees of the company, for the company’s commercial business and the employee does not have an interest in the company of more than 10%;
• If it is a farmhouse occupied by a qualifying farm worker;
• A property occupied by a financial institution in the course of lending;
• Owned by a provider of social housing.

A separate return must be completed for each property claiming a different relief. If you are claiming the same relief for more than one property, this can be done on one return.

What information is required to complete an ATED return?

When completing an ATED return you will need to include the following information for each property:

• Property title number;
• Address and postcode;
• Date of acquisition;
• Value;
• Whether a professional valuation has been obtained in the period covered by the return;
• Date of valuation;
• Any relevant PRBC reference.

What are the chargeable amounts for property affected by ATED?

Chargeable amounts for chargeable period 1 April 2014 to 31 March 2015

If you own a property within a company wrapper and want to discuss your future tax liabilities please contact Lesley Stalker by emailing las@rjp.co.uk.