ATED tax returns

The final version of the tax return for the new Annual Tax on Enveloped Dwellings (ATED) has been published by HMRC.  So, now is the time to start thinking about whether ATED applies to you or your clients.

ATED is only a potential concern if a corporate entity, or a partnership with a corporate member, or a collective investment scheme, owns UK real estate that is used for residential purposes and is worth £2,000,000 or more.  Even then ATED may not apply because there are a number of reliefs for the likes of property developers, property traders and those running a property rental business.

In our experience, it is still the case that not everyone who is affected by ATED knows about it, particularly if the corporate owner is not based in the UK.  So do spread the word!  Especially as it is the responsibility of the owner to submit an ATED tax return by 1 October and pay any tax due by 31 October, or the usual penalties for late filing and late payment of tax, as well as interest, will become due.

It is also essential to submit an ATED tax return in order to claim any relief that is due.  Sadly the relief does not apply automatically and exempt the owner from the need to submit an ATED tax return!  An ATED return will need to be submitted for each ATED tax year in which the relief is due.