Local Business The Advice Flyer
Does your company own a residential property worth more than £ 500,000 ?
By Chris Annis , Director at LB Group , a Top 75 firm of Chartered Accountants , Chartered Tax Advisers and Business Advisers .
If you own a residential property worth £ 500,000 or more within a company or a partnership with at least one corporate member , you need to be aware of the Annual Tax on Enveloped Dwellings ( ATED ) regime .
The ATED rules were introduced several years ago and initially applied only to very expensive residential properties worth more than £ 2m . However , the rules now extend to all residential properties worth more than £ 500,000 held in a corporate structure . The key valuation date in 1 April 2012 , or the purchase date if this is later , although regular revaluations every 5 years will mean that increasing numbers of properties will potentially
be caught by the rules .
If the rules apply to your company , the next ATED return and payment , if applicable , will be due by 30 April 2017 . This return will cover the period from 1 April 2017 to 31 March 2018 . Please note if you acquire a property during the year which falls within the rules , an ATED return must be submitted within 90 days of the acquisition . Similarly , selling a property within the ATED regime or changing use during the year normally requires a further return to be submitted to HMRC .
Not all companies caught by the rules will have tax to pay . There are several reliefs available , for example for rental properties and properties purchased for development and sale , and these reliefs can reduce the tax charge to zero . Even if a relief applies , the company must still complete an ATED return and claim the relief each year otherwise significant late filing penalties can arise .
Penalties incurred for late submission ( even if tax charge is nil ) start with an automatic £ 100 for missing the 30
“ Dirty Money ” What is Money Laundering ?
Money Laundering is when proceeds of crime , being an illegal activity , are used to purchase property or goods in order to make the money turn legally clean . This
Sam Alvin can be by way of purchasing a property which involves moving the money through a solicitor ’ s client account .
There have been many cases recently where “ dirty ” money obtained from crimes has been “ cleaned ” through buying properties . As legal advisers we are required to ensure that all the money we receive into our client account is from a legitimate source , and to make enquiries if we have any doubts .
This is why solicitors ask so many questions as to where the money for the purchase of a new home has come from . At a time of great excitement and expectation for the client when moving house , our enquiries can lead to frustration and annoyance .
The standard client answer of , “ Do I look like a money launderer ?” will not do . The mere supplying of bank statements is not enough . We are
required to check where your funds have come from whether it be savings , proceeds from the sale of a property , an inheritance or a gift . Whatever information you have which shows where your money has come from in order to fund your purchase we will need to see . We are not here to trip you up , or catch you out , but are here to assist and ensure that your matter runs smoothly . If you are not sure what you need please just ask . We do not bite and understand that this can be one of the daunting areas of the law .
So a little tip , if you are looking to buy a property in the near future , make sure you keep your bank statements , copy ISA ’ s , wage slips and any other information which may help . If you are obtaining a gift from a lovely parent or some other person , the same rules apply to them as you and your conveyancer will need to see the same evidence from them along with their identification documents .
For further information please contact Sam Alvin on 01473 255591 or email sam . alvin @ jackamans . co . uk .
This article provides only a general summary and is not intended to be comprehensive . Special legal advice should be taken in any individual situation .
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