What is ATED?

Annual Tax on Envelope Dwellings also known as #ATED is a tax that is often missed by companies.  

 

It is an annual tax payable when a UK residential property that is valued at more than £500,000 is owned by a company or other non-natural person such as a partnership. 

 

The tax payable varies and is based on the value of the property(s) that fall under ATED, but for most investors / developers, there’s no tax to pay but you must make an ATED return or face penalties. 

 

Because many businesses are unaware of this tax and fail to recognise that it applies to them. This has led to many being fined even if their tax payable ends up being nil. The recent case Hughes Property Partners Ltd v HMRC (2023) UKFTT 453 (TC) (25/05/23) saw the FTT dismiss the taxpayer’s appeal against late filing penalty charges under FA 2009 Sch55 for filing of an ATED return eight months late. This shows that the issue is very much alive and HMRC now has precedence to enforce the penalties onto unsuspecting businesses. 

 

This is the first of a series of six articles on ATED by jenny@property-tax-advice.co.uk that will be published on our social media and blog page each Wednesday – please bookmark our page to get the follow up posts. If you’re a client of Property Tax Advice, we can have an overview conversation about this, or we can be instructed to handle this for you.