Q&As

In order to qualify for property rental business relief from ATED, must the company’s sole purpose be a property rental business or may the company also have another purpose (eg a dental practice)?

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Published on LexisPSL on 20/06/2017

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • In order to qualify for property rental business relief from ATED, must the company’s sole purpose be a property rental business or may the company also have another purpose (eg a dental practice)?
  • Qualifying property rental business relief
  • Meaning of ‘property business’

In order to qualify for property rental business relief from ATED, must the company’s sole purpose be a property rental business or may the company also have another purpose (eg a dental practice)?

A number of reliefs and exemptions are available from the annual tax on enveloped dwellings (ATED). One such relief is for property rental businesses.

Relief is available from ATED where a property is, or steps are being taken to secure that the property will be, let to tenants and is a qualifying property rental business (section 133 of the Finance Act 2013 (FA 2013)). See HMRC ATED Technical Guidance para 31.

Qualifying property rental business relief

A qualifying property rental business for these purposes is a property business:

  1. as defined in Chapter 2 of Part 4 of the Corporation Tax Act 2009 (CTA 2009), and CTA 2009, Pt 4

  2. which is run on a commercial basis with a view to profit

(FA 2013, ss 133(3)–(6)). See HMRC ATED Technical Guidance para 31.

This relief is not available on any day during a chargeable period when a 'non-qualifying individual' is permitted to occupy the property. A non-qualifying individual is, broadly, a person who is entitled to an interest in the property in question or a person connected to such person. In such circumstances, relief may also be withdrawn on a look-forward and look-back basis as follows:

  1. look-forward—relief is

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