Valuations for tax (ATED/CGT/SDLT)
Designed to reduce the practice of buying high value UK property for non-genuine commercial use, ATED is targeted at companies striving to envelope dwellings.
Not only has the new ruling in April 2016 affected the thresholds, bringing the lower banding down to a £500,000 valuation, but SDLT and CGT are also affected
The property valuation bands and 18/19 rates of tax due under ATED, are set out in the table below.
More than £500,000 up to £1 million
More than £1 million up to £2 million
More than £2 million up to £5 million
More than £5 million up to £10 million
More than £10 million up to £20 million
More than £20 million
Why get a ATED/ARPT Valuation?
Companies that own residential property in the UK are subject to the Annual Tax on Enveloped Dwellings (ATED). The valuation date used for this tax is 1st April 2012 or the acquisition date, if the property was acquired later. The valuation figure on 1st April 2012 will be used for 5 years of tax return periods commencing 1st April 2013. The property will have to be valued again in 2017. Normally, the return must be submitted by 30th April each year. Late returns and late payments also attract penalties and interest. Please note that where a property is jointly owned, all owners are responsible for ensuring the returns and payments are submitted. It is important to submit an accurate figure to HMRC as you will have to pay penalties together with any increase in the ATED/ARPT and late payment interest.
THE DEADLINE TO SUBMIT A REPORT IS 30TH APRIL 2018
The movements in the UK property market in the last five years may mean properties falling into a different band from 2018. For example, properties at the lower end of the scale may have increased in value, thus, moving into a higher band, doubling the ATED payable. The drop in the super-prime market may mean a property in the “more than £20 million band” falling into the “£10 million to £20 million band”, halving the tax payable.
What to do now?
This is a self-assessed tax, and requires property owners that meet the regulations to complete an ATED return. A market value is required on the property to calculate the banding rate. Late returns will attract penalties; 30 days late will incur a fee of 5% of the tax due, and after 3 months there is a daily charge of £10 a day up to £900 maximum, so ensuring a prompt return is crucial
How Anderson, Wilde and Harris can help
As RICS registered Chartered Surveyors we conduct residential property valuations to help companies meet the requirements set out by HMRC. There are various options to consider when faced with ATED, and Anderson, Wilde & Harris can refer you to an adviser for the best option. These include:
- Maintain the structure as it is and pay the ATED
- Apply for relief, or exemption, if applicable
- Consider unwinding into direct ownership, or hold a nominee arrangement
Contact us for a free quote
About Anderson Wilde & Harris
Our people have a wealth of experience and have consulted all types of clients from large developers to private individuals.
We value every client and we ensure that they get the best advice for their situation.
Our expertise is recognised by the Royal Institution of Chartered Surveyors.