Companies with Residential Property – to file or not to file?

Companies with Residential Property – ATED Filing Reminder – Potential 30th April 2020 Filing Deadline

This is a reminder that you should review any residential properties now to decide if your company has a filing requirement with HMRC for Annual Tax on Enveloped Dwellings (ATED), including just applying for relief from ATED.  Failure to make even a “nil” return for ATED, including if you are a property development or property letting company, can mean that your company could be hit with late filing penalties of up to £1,600.

As a company, if on 1 April 2020 you hold a residential property as trading stock or as a capital asset then you may need to make a return to HMRC within 30 days i.e. no later than 30 April 2020. Further filing deadlines may occur if you acquire or convert properties during the year.

ATED Deadlines for 2020/21 tax year
30 April 2020 If your property is within the scope of ATED on 1 April 2020
30 days of acquisition If you acquire a property within the scope of ATED after 1 April 2020
90 days for newly built properties If you are a property developer with a newly completed dwelling, then your filing deadline for an ATED return is 90 days from the date the property is classed as a dwelling for Council Tax purposes or the date it is first occupied, whichever is earliest.

 

A property will be within the scope of ATED if its value, as of 1 April 2017 or at date of acquisition if later, is over £500,000.

Any company, partnership with a corporate member or collective investment scheme that owns a UK residential dwelling valued over £500,000 may be required to submit an ATED return, even if no tax is due.  There are a number of exemptions and reliefs available to reduce your liability under ATED.  However a “relief” will still require you to make a return to HMRC within the above time limits. A formal property valuation is not required but you should be reasonably comfortable with your estimate.

Our flow chart below will help you to decide whether you may need to make an ATED return and if you qualify for any relief or exemption. 

Click here for our ATED Returns Flowchart

You should review if you have any obligation to pay ATED or claim relief.   If you need to submit a return you can register with HMRC’s on-line service: www.gov.uk/guidance/register-for-the-annual-tax-on-enveloped-dwellings-online-service in good time.  You will need a Government Gateway account. HMRC open the filing window on 1 April

 

For further information contact Rob Durrant Walker, Business Tax Technical Director, rdwalker@garbutt-elliott.co.uk

or Angela Mikola, Senior Tax Consultant, amikola@garbutt-elliott.co.uk