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  • Annual Tax on Enveloped Dwellings

    The annual tax on enveloped dwellings (commonly referred to as “ATED”) applies to ‘non-natural persons’ (usually companies) owning UK residential property with a value in excess of £500,000. While certain reliefs are available from the ATED charge, it is common for the only asset of the non-natural person to be the property in question, which does give rise to issues around funding the ATED charge from the company.

    Mitigate risk

    There are many tax nuances surrounding ATED from a capital gains tax, income tax and stamp duty land tax perspective. We can help you navigate these technicalities and ensure you do not receive unwarranted attention from HMRC.

    Tax relief

    There are several reliefs from the ATED charge, importantly though these only apply to certain circumstances and must also be claimed.

    Review your position

    A common misconception is that ATED only applies to non-UK residents. This is not the case. ATED can and does apply in many unforeseen situations

    How can we help?

    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. 

    We are experienced in ATED and associated matters and advise many clients on how best to comply with their reporting obligations as well as mitigate any tax due

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    Please provide as much detail as possible in regards to the reason for your enquiry so our tax advisers can prepare and tailor their response to reflect your needs. We will endeavour to - respond / call you back - to discuss your enquiry and you will not be charged for this time.

  • This field is for validation purposes and should be left unchanged.