Is your company in possession of any residential property valued at over £500k?

ATED on company residential properties £500,000

If so, it is necessary for you to complete an ATED return (Annual Tax on Enveloped Dwellings) and fulfill the corresponding tax obligations. ATED returns are due in April each year for the following tax year. Therefore, for the 2024/2025 tax year, ATED Returns ought to have been submitted to HMRC by 30 April 2024, along with any applicable charges for properties held at the start of the tax year.

It is important to note that the lower valuation limit for this tax was initially set at £2m when it was introduced in April 2013, but has since been reduced to £500k, resulting in a larger number of properties being subject to these regulations.

What is the value of your properties?

A few years ago, some astute individuals discovered that purchasing a residential property through a limited company would result in significantly reduced Stamp Duty charges. In response, the government introduced the ATED system to discourage this practice and impose an additional tax. Each individual property requires an ATED return, which must be prepared separately from any claims for applicable reliefs.

What is the tax charge?

For the current period from April 2024 to March 2025, the tax charge for properties held is £4,400. Properties valued at over £1m incur substantially higher charges, with additional significant increases at £1m, £2m, £5m, £10m, and £20m. The regulations surrounding this tax are intricate, and there are various reliefs that may be claimed. Severe penalties are imposed for late submission of returns.

Revaluation year

It is mandatory to reassess the value of your property every 5 years according to ATED regulations. The chargeable period for 2023 to 2024 is a revaluation year. If you have acquired a property, follow these guidelines:

  • If the acquisition date is on or before 1 April 2022, use 1 April 2022 as the revaluation date.
  • If the acquisition date is after 1 April 2022, use the date of acquisition as the valuation date.

Help with ATED

If you require assistance with your ATED returns, please contact us immediately. We can help you obtain accurate valuations and ensure timely preparation and submission of your ATED returns. Additional details can be found on the Government website.

About Graham

Accountant specialising in tax, property, and estate planning. A regular speaker at landlord, property Investor, and later life planning events.

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