ATED (Annual Tax on Enveloped Dwellings)
Discussion
I am just trying to understand ATED and how it applies to companies owning residential properties and renting them out (residential purposes not commercial). From reading various websites, including gov.co.uk, the tax applies to properties worth over 500k but is that a single property or a portfolio of say 3 x 200k properties?
If it applies to a portfolio of properties worth over 500k in a company, would it not be easier to set up multiple companies and keep the value of the properties less than 500k in each company to avoid paying ATED?
Welcome your thoughts and advice on this! Thanks
If it applies to a portfolio of properties worth over 500k in a company, would it not be easier to set up multiple companies and keep the value of the properties less than 500k in each company to avoid paying ATED?
Welcome your thoughts and advice on this! Thanks
Thanks for this. This is the only point that would possibly exemplify this but is based on the definition of commercial basis.To quote:
•let to a third party on a commercial basis and isn’t, at any time, occupied (or available for occupation) by anyone connected with the owner
Does commercial basis constitute letting properties to the general public or does it mean letting it out to a business i.e. for offices?
•let to a third party on a commercial basis and isn’t, at any time, occupied (or available for occupation) by anyone connected with the owner
Does commercial basis constitute letting properties to the general public or does it mean letting it out to a business i.e. for offices?
It means that if you let it to anyone at all at the going market rate (inc a standard btl type residential let) then you are exempt.
Watch out though as if you have a single property over £500k then you will still have to declare it each year and then claim the letting relief. Don't just ignore it as HMRC will likely clobber you even if it would qualify for the relief and no tax is due.
S
Watch out though as if you have a single property over £500k then you will still have to declare it each year and then claim the letting relief. Don't just ignore it as HMRC will likely clobber you even if it would qualify for the relief and no tax is due.
S
Edited by siheb on Wednesday 5th July 08:15
If it is in the ATED price bracket and rented out to an unconnected person then you do an exemption return yearly with no tax to pay. If it is rented to a director or shareholder even at market rent then ATED is payable.
It is a single property I.e. One company with one £500k property in scope for ATED. One company with 10 £100k properties then not in scope for ATED.
If th building is proper 100% commercial I.e offices, shopping centre, warehouse then no return required.
It is a single property I.e. One company with one £500k property in scope for ATED. One company with 10 £100k properties then not in scope for ATED.
If th building is proper 100% commercial I.e offices, shopping centre, warehouse then no return required.
Edited by ROSSinHD on Wednesday 5th July 19:58
Edited by ROSSinHD on Wednesday 5th July 20:14
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