HomeInsights & thinkingAnnual tax on enveloped dwellings – a pitfall for the farming community?
Annual tax on enveloped dwellings – a pitfall for the farming community?
31 July 2014
Since 1 April 2013, an annual charge has been levied on residential property worth more than £2 million owned by “non-natural persons”, known as the annual tax on enveloped dwellings (“ATED”).
In the 2014 Budget, the Chancellor extended this charge to include:
properties worth over £1 million from 1 April 2015; and
properties worth over £500,000 from 1 April 2016.
Properties are assessed using their market value either on 1 April 2012 or on the date the property was acquired, if later. Properties will be revalued every 5 years.
For the purposes of the regime a “non-natural person” includes limited companies and partnerships where one of the partners is a corporate partner.
The farming community has reacted over the years to the various announcements from the Chancellor, restructuring where necessary to ensure they take advantage of any relevant reliefs or exemptions. If you are a farming business that has structured itself either as a limited company or as a partnership with a corporate partner, then this new regime is something that you will need to look at closely.
There are provisions for reliefs and exemptions for the farming community. Farmhouses and cottages on the farm are most likely to be caught, particularly in the future as the threshold comes down. Depending on the circumstances, there are reliefs available for property rental businesses (broadly, where a residential property is held for the purposes of a property rental business run on a commercial basis) and farmhouses (broadly, where the farmhouse is occupied for the purposes of a farming trade).
However, to benefit from a relief, you must file an “ATED return”. If you do not, you will be liable for the tax and subject to the normal rules governing late filing of tax returns and late payment of specified taxes.
For further information about ATED contact our agriculture and estates department on 01242 514000.
We are delighted to welcome senior associate Adam Hale to our agriculture & estates team this month. Adam, a specialist in agricultural law, estate planning and estate administration, joins the…
For prescriptive rights to arise over land, they have to have been exercised without force, secrecy or permission of the landowner. Winterburn v Bennet In the case of Winterburn v Bennett, the…
The High Court decision in Lancashire County Council v The Secretary of State for Environment is a salutary warning to landowners of the risks of not taking steps to prevent…
Our website uses cookies to improve your experience while you navigate through our website. Out of these cookies, the cookies that are categorised as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyse and understand how you use our website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies but it may affect your browsing experience on our website. You can find our cookie policy here.
Necessary cookies are absolutely essential for our website to function and enable core functionality such as security and accessibility. These cookies do not store any personal information. You can block these cookies by changing your browser settings, but this may affect how the website functions.
We use performance cookies such as Google Analytics to help us count the number of visitors and to see how visitors move around our website when they are using it. This helps us to improve the way our website works, for example, by ensuring that users are finding what they are looking for easily. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our cookie policy.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Cookie
Duration
Description
__cf_bm
30 minutes
This cookie, set by Cloudflare, is used to support Cloudflare Bot Management.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Cookie
Duration
Description
_ga
2 years
The _ga cookie, installed by Google Analytics, calculates visitor, session and campaign data and also keeps track of site usage for the site's analytics report. The cookie stores information anonymously and assigns a randomly generated number to recognize unique visitors.
_gat_UA-562889-3
1 minute
A variation of the _gat cookie set by Google Analytics and Google Tag Manager to allow website owners to track visitor behaviour and measure site performance. The pattern element in the name contains the unique identity number of the account or website it relates to.
_gid
1 day
Installed by Google Analytics, _gid cookie stores information on how visitors use a website, while also creating an analytics report of the website's performance. Some of the data that are collected include the number of visitors, their source, and the pages they visit anonymously.
vuid
2 years
Vimeo installs this cookie to collect tracking information by setting a unique ID to embed videos to the website.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.