Introduction Background Note
18.The Annual Tax on Enveloped Dwellings is an annual tax payable by companies, partnerships with a corporate member, and collective investment vehicles which own UK residential property valued at more than £2 million.
19.At Budget 2014 the government announced that the £2 million ATED entry threshold would be lowered to £500,000. Recognising the additional administrative burden on businesses that hold residential property over £500,000, in particular those entitled to claim reliefs, the government also announced a consultation on ways to simplify the administration of ATED.
20.A consultation document Annual Tax on Enveloped Dwellings: Reducing the Administrative Burden on Business was published in July 2014 and the government’s response to the consultation was published in December 2014. This section takes forward proposals in response to that consultation.
21.The section introduces a new type of ATED return – the ‘relief declaration return’. For each type of relief being claimed, the company will submit a 'relief declaration return' stating that a relief is being claimed in respect of one or more properties held at that time. No details will be required of the individual properties or the number of properties eligible for the relief. Where a property is acquired in-year which also qualifies for the same type of relief, the existing return is treated as also having been made in respect of that property.
22.A separate relief declaration return will be required where a property is acquired during the year that qualifies for a different type relief and where no relief declaration return has previously been made in relation to that particular relief.
23.A normal ATED return is required, as now, in respect of any property which does not qualify or ceases to qualify for a relief; i.e. where tax is due.
24.The overall result is that businesses with properties which qualify for relief will generally only be required to deliver one relief declaration return a year for all properties covered by a particular relief instead of, as now, multiple detailed returns for each such property. This offers a significant reduction in the administrative burden.