Any company or partnership with a corporate member that owns a UK residential property with a value in excess of £2m as at 1 April 2012, will need to submit an ATED return by 30 April 2015.
From April 2015, this regime is extended to smaller residential properties, as explained in the HMRC’s announcement issued earlier this month, which brought all previous guidance together on this subject in one paper. West Sussex and Gatwick-based chartered accountants and tax advisers, Carpenter Box, is warning all farmers potentially affected by this tax to take note of the announcement to safeguard their interests.
Alison Aggleton, Agricultural Tax Adviser at Carpenter Box, said: “Many farmers believed this tax didn’t apply to them because, when originally announced, it only caught the small number of properties valued over £2m.
“Now though, with the limits reducing to between £1m – £2m in 2015/16, and £500k – £1m in 2016/17, a far greater number of properties will fall within the scope of ATED. Moreover, it must be remembered that this is a relief rather than an exemption, so it must be claimed for rather than assumed.”
ATED currently affects only a minority of farms (as family partnerships tend to be the preferred trading vehicle), but as Alison explains: “There are a substantial number of trading entities that include a corporate vehicle within a partnership structure and farms in this situation need to be thinking about how this tax affects them and possibly taking steps to reduce their liability, now and in the future.”
If you require any assistance or further information on ATED, please contact Alison Aggleton at Carpenter Box on 01903 234094.