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ATED and nil returns

22 August 2022 / Rob Durrant-Walker
Issue: 4854 / Categories: Comment & Analysis
Nil return menace

Key points

  • The annual tax on enveloped dwellings (ATED) potentially applies to UK residential properties held within corporate envelopes.
  • Nil returns may be due even when no tax is due.
  • Late filing penalties may be due on a return submitted after the due date.
  • HMRC expands on the definition of ‘dwelling’ in its ATED technical guidance.
  • Tax agents should state in their engagement terms whether they are advising the client on ATED.

Too many agents come across the annual tax on enveloped dwellings (ATED) infrequently yet too late. Unfortunately a first experience for many arises on their property developers or letting business clients where no tax is even due but where the tight filing deadlines for inconvenient yet mandatory ‘nil returns’ have already expired.

For instance if a client had an interest in a dwelling held by a corporate entity at 1 April 2022 valued at...

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