ATED—reliefs and exemptions

The following Tax practice note provides comprehensive and up to date legal information covering:

  • ATED—reliefs and exemptions
  • What reliefs and exemptions are available?
  • Reliefs
  • Property rental business
  • Property developers
  • Property traders
  • Financial institutions acquiring dwellings in the course of lending
  • Interim relief
  • Other reliefs
  • Exemptions
  • More...

ATED—reliefs and exemptions

What reliefs and exemptions are available?

The basic charge to annual tax on enveloped dwellings (ATED) is explained in Practice Note: ATED—the basics. A number of reliefs and exemptions are available from ATED which are summarised below and considered in more detail in this Practice Note.

Reliefs from ATED include relief in relation to:

  1. property rental businesses

  2. property developers

  3. property traders, and

  4. financial institutions acquiring dwellings in the course of lending

A further relief, called interim relief, is available to assist with the cash flow position of taxpayers. Interim relief is a mechanism for claiming reliefs from ATED rather than a relief from ATED in its own right.

Bodies exempt from ATED include:

  1. charitable companies, and

  2. public bodies and bodies established for national purposes

HMRC published the ATED: Reducing the administrative burden for business consultation document in July 2014, considering how to assist businesses that are entitled to claim relief from ATED in satisfying their filing obligations in a way that reduces the related administrative burden. The consultation set out the following two proposals:

  1. retain the filing date and allow taxpayers to submit a single ATED return in respect of multiple properties and allow such taxpayers to file a statement or balancing return at the end of a chargeable period detailing changes taking place during the chargeable period, and/or

  2. introduce an 'exempt status' relief for taxpayers

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