{"id":17271,"date":"2018-06-27T16:13:11","date_gmt":"2018-06-27T16:13:11","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/?p=17271"},"modified":"2018-06-27T16:14:48","modified_gmt":"2018-06-27T16:14:48","slug":"limited-company-buy-to-let-landlords-need-to-be-aware-of-ated","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/limited-company-buy-to-let-landlords-need-to-be-aware-of-ated\/","title":{"rendered":"Limited company buy to let landlords need to be aware of ATED"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p><span style=\"font-weight: 400;\">The Annual Tax on Enveloped Dwellings (ATED) traditionally only affected the wealthiest landlords, who had put their property affairs into limited companies and owned property worth over \u00a32 million.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, the threshold for ATED has changed. Now, companies owning UK residential property worth in excess of \u00a3500,000 may be liable for ATED.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This has clear implications for some landlords within the Private Rental Sector who have recently switched to or are planning to use a <\/span><a href=\"https:\/\/www.commercialtrust.co.uk\/buy-to-let-mortgage\/\"><span style=\"font-weight: 400;\">buy to let mortgage<\/span><\/a><span style=\"font-weight: 400;\"> through a limited company.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">With property prices in the South East being traditionally more expensive than other areas of the UK, and experiencing highest rates of price growth, it is expected that landlords with investments in these areas may be the more prolific group affected.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The rules around ATED may require many more buy-to-let landlords to complete an ATED return, than the proportion who actually end up with an ATED tax liability to settle. Certainly the lower threshold will mean more people have to act on ATED than was previously the case.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, what it is vital for landlords to know is that, if their property is owned through a company structure and does fall into the \u00a3500,000-plus price bracket, relief from ATED may be applicable, <\/span><b>but an ATED return must be completed and returned to HMRC. <\/b><\/p>\n<p><span style=\"font-weight: 400;\">Relief from ATED may be able to be claimed, if your property is:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">let to a third party on a commercial basis and isn\u2019t, at any time, occupied (or available for occupation) by anyone connected with the owner<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">open to the public for at least 28 days a year<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">being developed for resale by a property developer<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">owned by a property trader as the stock of the business for the sole purpose of resale<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">repossessed by a financial institution as a result of its business of lending money<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">acquired under a regulated Home Reversion Plan<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">being used by a trading business to provide living accommodation to certain qualifying employees<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">a farmhouse occupied by a farm worker or a former long-serving farm worker<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">owned by a registered provider of social housing<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Landlords must file an ATED return to HMRC if their property is considered to be a dwelling. This means there is, for example, a house or flat anywhere in the gardens, grounds or buildings within the property that someone can reside in, even if there is nothing to pay.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are a number of properties that are considered exempt from the term \u2018dwelling\u2019 for this purpose, these include: <\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">hotels<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">guest houses<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">boarding school accommodation<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">hospitals<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">student halls of residence<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">military accommodation<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">care homes<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">prisons<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In essence, you must file a completed ATED return if your property is; classified as a \u2018dwelling\u2019, is located in the UK, owned completely or partly by, a company or partnership, or a collective investment scheme (such as a unit trust or open-ended investment vehicle) and was valued at more than:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">\u00a32 million on 1 April 2012, or at acquisition if later, for returns from 2013 to 2014 onwards<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">\u00a31 million on 1 April 2012, or at acquisition if later, for returns from 2015 to 2016 onwards<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">\u00a3500,000 on 1 April 2012, or at acquisition if later, for returns from 2016 to 2017 onwards<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Returns are due to HMRC on or after 1 April in any chargeable period. There are a number of scenarios in which you could be charged a penalty (and potentially interest):<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Failure to file a return on time<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Failure to pay on time<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Submitting an inaccurate return<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><b>Concerned about ATED? Seek professional ta<\/b><b>x advice<\/b><\/h2>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">If you own property through a company which is in excess of \u00a3500,000 and you have questions regarding ATED, your best recourse is to seek the advice of a professional tax specialist. You can find a local professional via the websites of the following professional bodies:<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"http:\/\/ccab.org.uk\/documents\/ChoosingAccountantTaxAdviser.pdf\"><span style=\"font-weight: 400;\">The Consultative Committee of Accountancy Bodies (CCAB)<\/span><\/a><\/p>\n<p><a href=\"https:\/\/core.tax.org.uk\/\"><span style=\"font-weight: 400;\">The Chartered Institute of Taxation<\/span><\/a><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Annual Tax on Enveloped Dwellings (ATED) traditionally only affected the wealthiest landlords, who had put their property affairs into limited companies and owned property worth over \u00a32 million. However, the threshold for ATED has changed. Now, companies owning UK<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/limited-company-buy-to-let-landlords-need-to-be-aware-of-ated\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[1],"tags":[],"wl_entity_type":[602],"modified_by":null,"_wl_alt_label":[],"jetpack_featured_media_url":"","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/limited_company_buy_to_let_landlords_need_to_be_aware_of_ated","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/17271"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/41"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=17271"}],"version-history":[{"count":3,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/17271\/revisions"}],"predecessor-version":[{"id":17332,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/17271\/revisions\/17332"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=17271"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=17271"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=17271"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=17271"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}