If you invest in property via a commercial entity, April 1st 2015 could be an expensive day in terms of the ATED property tax.
ATED is the Annual Tax on Enveloped Dwellings, a charge on property investment companies that own high-value residential homes in the UK.
Until now, it has only been charged on those with a market value in excess of £2 million on April 1st 2012 or a subsequent acquisition date.
But from April 1st 2015, a new charge comes into effect on anything from £1 million to £2 million – and the lowest threshold will drop further to £500,000 in 2016.
You pay this property tax if you are a company or corporate body, a collective investment vehicle, or are investing in partnership with one of those entities.
However, there may be certain exemptions – charities might not need to file a return at all, while other reliefs can be claimed by filing a return, which your property accountants can help you to compile.
Your property accountants can also help you to understand your exposure to this tax, including how much it increases year by year – currently a fairly punishing 50% higher than the headline rate of inflation.