In this week’s Q&A, Abigail Bothe at Croner-i VIP Tax Team, explains when annual tax on enveloped dwellings (ATED) is chargeable under qualifying rules in complex tax planning scenarios
Q. My client company is intending to purchase a residential property for £1.5m. This property will initially be rented to the director’s son at market value for a short period before let to a third party. Would the company come within the charge to ATED? Is there any relief we can claim for this?
A. First, we need to establish whether the company is within the scope of ATED, see Finance Act 2013 section 94. Given the residential property is over £500,000 at the later of acquisition and the revaluation period (1 April 2022) and it is owned by a company, they will be in the scope of ATED.
ATED returns are due on a chargeable person regardless of whether they have ATED to pay. This means if a company has a single dwelling over £500,000 and they are looking to claim relief, they are still due to file an ATED return.
