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Agricultural update - The Annual Tax on Enveloped Dwellings

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9 December 2015

The Annual Tax on Enveloped Dwellings (ATED) was introduced from 1 April 2013 and affected companies and partnerships with corporate partners, that hold residential property with a value over £2 million. This limit was reduced to £1 million from 1 April 2015 and will be further reduced to £500,000 from 1 April 2016. 

The deadline for submission of the 2015 return, where the property was in the value band between £1million and £2 million was extended to 1 October 2015. Therefore all 2015 returns should now have been submitted.

However, for 2016, all returns will need to be submitted by 30 April 2016 and any tax charge paid by 30 April 2016. Therefore, businesses affected should check if they will need to submit a 2016 return well before April 2016.

Available reliefs

Reliefs are available from the annual charge, subject to certain conditions, but these need to be claimed on the relevant form as relief is not automatic. Therefore a form will still need to be submitted by the due date. Examples where relief might be available for farming businesses are:

a) farmhouses;
b) rental property; or

c) if occupied by employees (who have no more than a 10% interest in the company).

Action required

Businesses should consider whether the reduced thresholds will mean they need to submit an ATED form or claim relief to avoid the annual charge for 2015 or 2016. ATED chargeable periods are for the 12 months from 1 April to 31 March.

Please contact Lyn Morey on 01242 680000 or lyn.morey@hazlewoods.co.uk if you have any ATED questions.