Tax on Properties owned by limited companies
The Annual Tax on Enveloped Dwellings (ATED) is a tax payable by limited companies that own interests in residential properties valued at more than £500,000.
These provisions affect certain companies, partnerships with company members and managers of collective investment schemes described in the legislation as NNPs.
To value a property, you can use a professional valuer or determine your own valuation. The valuation of the property must be in pounds sterling. Valuations must be on an open-market willing buyer, willing seller basis and be a specific amount.
The valuation date depends on when you owned the property.
The valuation dates are:
- an initial valuation date,
- a revaluation date.
There are fixed revaluation dates for all properties, every 5 years after 1 April 2012, for example on 1 April 2017, 1 April 2022 and so on, regardless of when the property was acquired.
The value of the property for any chargeable period is therefore the later of:
- its initial valuation date,
- the revaluation date.
There is no ATED or ATED-related Capital Gains Tax payable if an individual owns a property directly, rather than through a company. There are also reliefs if a property is used for commercial purposes.
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