ATED is yet another example of the UK government and HMRC clamping down on landlords of UK property. Broadly, ATED applies where a non-natural person (mostly in practice this is a company but can also include a trust or other such quasi structure) owns a UK residential property.
In its simplest format, ATED imposes a flat annual charge on the holder of the residential property to pay a fixed amount over to HMRC dependant on the property value. The higher the value of the property, the higher the charge. An ATED return must also be completed each year by 30 April through which to report and pay the ATED charge.
Importantly though, a number of exemptions apply to the ATED charge, the most common of which is where the property is held by a non-natural person and is let out on a commercial basis. However, this does not prevent an ATED return from being filed, the ATED return must always be filed as this is the mechanism to both report and claim the relevant relief.
The ATED charge is most commonly found where a non-UK national individual holds a UK residential property through a (usually) UK company, the property then being lived in by a family member, or themselves. In this case, as the only asset of the UK company concerned is the property itself and therefore there is no income generated within the company, where the ATED charge applies, the non-UK national individual is often forced to commit personal funds from abroad into the UK by which to pay the charge itself. In this circumstance, there are numerous technical arguments which persist which would seek to subject those funds to UK income tax.
