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Changes To Annual Tax On Enveloped Dwellings For 2018

Do you own residential property in a company?

 
 

POSTED BY HELEN BEAUMONT ON 06/04/2018 @ 8:00AM

A limited company, regardless of whether it is registered in the UK or not, has to pay Annual Tax on Enveloped Dwellings if it owns residential property valued over £500,000 in the UK ...

The Annual Tax On Enveloped Dwellings is changing for 2018!

The Annual Tax On Enveloped Dwellings is changing for 2018!

copyright: andreypopov / 123rf stock photo (licensee)

The ATED tax year is 1st April to 31st March and companies must file a return by 30 April for each ATED year during which they held residential property in the United Kingdom.

"If you feel reliefs are available (commonly Property Rental Business Relief), then an ATED relief return must be submitted!"

The company is liable to pay an annual chargeable amount based on the value of the property should any reliefs not apply. This will be based on the value of the property at it's most recent valuation date.

The annual chargeable amounts usually increase in line with the previous September's consumer price index (CPI). However, in 2015, the government decided to increase the annual chargeable amounts by an additional 50%.

As these property value bands are not index-linked, more and more properties will come within the scope of the ATED and will be liable to more substantial annual charges as time goes on.

"Non-resident CGT (NRCGT) also changes!"

Currently, NRCGT only applies to tax gains realised by non-residents on the disposal of UK residential property (aligned with ATED which only applies to UK residential property interests). It was announced in 2017's Autumn Budget that from April 2019 NRCGT will be extended to also tax:

  1. Gains arising from disposals of UK commercial properties

  2. Disposals of interests in 'property-rich' entities where the non-resident person holds (or has held) a 25% or greater interest in the company. Property-rich entities include companies that derive 75% or more of its gross asset value from UK property (both residential or commercial).

Rebasing is available for the April 2019 value where the taxable property is only brought into charge for capital gains tax as a result of these new rules.

"Would you like to know more?"

The deadline of 30th April is fast approaching so if you need some help with your Annual Tax on Enveloped Dwellings (ATED) return, do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.

Until next time ...

HELEN BEAUMONT


PS:

If you're looking to work with an expert tax advisor with a wide range of tax experience, do visit www.essendontax.co.uk to find out more about me and discover how I can help!


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More about Helen Beaumont ...

Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen’s specialist knowledge in tax planning and experience ensures every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.