Tax Due on Property Inside Company

Tax Due on Property Inside Company

Annual Tax on Enveloped Dwellings (ATED) is due for filing to HMRC next week on the 1st October.

The tax was introduced by the current coalition government to try and combat tax evasion of Stamp Duty Land Tax.

In simple terms,  rather than selling properties directly and stamp duty being paid, many larger valuable properties are owned by corporate structures, meaning that when the property was sold, it was actually the ownership of the company that was sold rather the property, as the property stayed inside and owned by the company, meaning that no stamp duty was payable.

To combat this and discourage the practice, ATED was introduced and is payable annually as a tax for properties valued at over £2m.  The tax is payable by the corporate structure that owns the property e.g. limited company, collective investments schemes and partnerships.

Tax return due by 01 October as follows:

Property Value                      

£2,000,001 to £5,000,000 = Annual Tax due 2013-14 of £15,000

£5,000,001 to £10,000,000 = Annual Tax due 2013-14 of £35,000

£10,000,001 to £20,000,000 = Annual Tax due 2013-14 of £70,000

£20,000,001 and over = Annual Tax due 2013-14 of £140,000

The ATED tax return is due by 1 October with tax payable to HMRC by 31 October.  Fines ar levied for late filing and late payments starting at £100 per notice, which couldf even be levied daily plus 5% late payment interest.