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Corporate Services Blog

HMRC to simplify claims for tax relief for ATED

02/07/2015

The Annual Tax on Enveloped Dwellings was introduced on 1 April 2013 and is a tax charged on companies or partnerships that hold property in the UK initially valued at more than £2m. In recent moves that valuation has changed to include properties valued at between £1m and £2m and will include properties exceeding £500,000 from April 2016.

The HMRC had published a consultation document dated 22 July 2014 in order to reduce the administrative burden on claims entitled to ATED relief as this tax is to soon affect a much wider scope of customers and therefore a reduction in the administrative burden was a welcomed suggestion.

There are numerous situations in which relief from this tax is available, but currently this can only be claimed by submitting a return for each property.

Now that this consultation period has concluded the HMRC have confirmed that legislation will be introduced in the Finance Bill 2015 in order to amend the Finance Act 2013 to introduce a ‘relief declaration return’. This return can be filed for each type of relief in respect of one or more properties held for that period, although a separate return will be required where a property is acquired during the year that qualifies for a different type of relief. Properties that cease to qualify for relief will also need to submit a separate return.

This will mean that properties eligible for a relief will only be required to deliver one relief declaration return per year for all properties covered under that particular relief. It is hoped that this will mean a significant reduction in the administrative burden. This is in line with the consultation where it was suggested that customers eligible to claim relief for more than one property submit one return.

This Finance Bill 2015 will also be amended to introduce a limit of £250,000 for properties valued up to £2m.

The consultation had also suggested a ‘Status’ regime to allow customers who are entitled to reduce their ATED liability to nil to apply for exempt status. This would mean that a return would not be required annually, although they would have had to provide a confirmation status at various intervals. However, this has not been mentioned in the recent HMRC publication on the annual tax on enveloped dwellings.

It should be noted that for chargeable properties eligible for relief from ATED for 2015-16 the returns must be filed by 10 October 2015, although in following years the normal filing deadline of 30 April will apply.




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