There are important tax implications of having an up to date value for the property that is owned by your company (or partnership which has a corporate partner). This information is used by us to complete returns for HMRC that determine how much or little tax you need to pay.

For our team of tax experts to best help you, provide information to us BEFORE it is required for use in Tax Returns or Accounts. We may have to apply for reliefs or check eligibility with HMRC and this takes time!

We want to make sure you don’t incur any penalties for late or incomplete submissions and this information may be crucial for our assessment of payment of ATED…

Accounts and Audit

Under new accounting rules that have recently come into effect (FRS102) the current value of property directly influences the profit & loss accounts of your organisation and also the way that depreciation is calculated.

You can assess values yourself, but these must be regarded as reliable and disclosure of the valuation method is required.

Annual Tax on Enveloped Dwellings (ATED)

This tax is payable by companies, partnerships and trusts on the UK residential property they own. We will complete your return for you and in many cases, you may not have any tax to pay. This may be due to the property being exempt or eligible for reliefs that we can apply. For example, if the property is valued at less than £500,000 or let out to a third party.

Tax Year Property Value Threshold
2013/14 £2 million
2015/16 £1 million
2016/17
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£500,000

Property that may have previously fallen outside of ATED may now have to be included especially given a revaluation to current market levels.

Property owned before 1st April 2012 must be revalued now (1st April 2017) to be used for the next five years returns.

You can work out the value yourself or you can use a professional valuer.
Valuations must be on an open-market willing buyer, willing seller basis and be a specific amount.
The valuation date you need to use depends on when you owned the property.

HMRC

If you have acquired property since this date you need to give us the value on the date you bought it. You must also update your valuation if circumstances change, for example if you redevelop the property.

A formal valuation, for example from an estate agent, surveyor or other professional, isn’t required where a ‘relief’ is being claimed but you must provide the best judgement estimate.

HMRC

When you acquire a new property you must let us know within 30 days so that we can assess whether HMRC will expect a payment with regards to ATED.

If HMRC challenge your valuation and if they find it is wrong they can charge you penalties and interest.

If you have any questions please get in touch with us to discuss them. Don’t bury your head in the sand when we are here to help you!

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