Annual tax on enveloped dwellings

    Annual Tax on Enveloped Dwellings (ATED) receives Royal Assent

     

    Return to be submitted by 1st October
    The ATED legislation has now received Royal Assent, and came into force with effect from the 1st April 2013, affecting residential properties worth in excess of £2m that are owned by Companies.  Since our last Newsletter, the ATED tax return has now been published, and this needs to be completed and submitted by 1st October 2013, and payment made by 31st October 2013.  Failure to do so could result in a penalty plus interest on the tax due.

    Which band does the House fall within?
    For the ATED return, an assessment is needed to determine the value of the property and hence which band it falls within.  For houses worth between £2m and £5m the annual charge is £15,000, between £5m and £10m the annual charge is £35,000, between £10m and £20m the annual charge is £70,000, and for houses worth in excess of £20m the annual charge will be £140,000.  Valuations must be on the basis of an open market, willing buyer and willing seller, and the value must be for a specific price.  It will not be acceptable to quote a figure somewhere ‘in the range of x and y’.

    Pre-Return Banding Check (PRBC)
    If there is doubt over which band a property falls within, it is possible to ask HMRC to confirm the appropriate banding of a property, by sending in the valuation for a PRBC – however this is only available to those who reasonably believe that their property valuation falls within a 10% variance of a banding threshold.  It should be noted that HMRC will not provide their own valuation, they will simply confirm whether they agree or disagree with the banding proposed.

    Using an Agent to submit the ATED Return
    It is possible to appoint an agent to act on behalf of the property owner, the ATED Return needs to have the appropriate box ticked that delegates authority to HMRC to enter into correspondence with the Agent.  Every property that falls within the scope of ATED must have a return submitted by the 1st October, regardless of whether it qualifies for any of the reliefs that are available.  There is an HMRC helpline available (0845 6030135) to answer queries, but given the reliefs available, the very high annual payments and the potential penalties, we would urge anyone affected to take professional advice as soon as possible.  We are already helping many clients who have been affected by this new legislation.

     
     

    Key contacts

    Philip Eddell

    Philip Eddell

    Director
    Country House Consultancy

    Savills Newbury

    +44 (0) 1635 277 709

    +44 (0) 1635 277 709