Where a company owns, or partly owns, residential property worth £500,000 or more, it must pay the Annual Tax on Enveloped Dwellings (ATED) charge each year in April or apply for relief from year, the charge must that charge.
The amount due for 2017-18 varies from £3,500, for properties worth up to £1m, to the maximum of £220,350, for properties worth £20m or more. The ATED is payable to HMRC by 30 April each year and applies in addition to council tax charged by the local authority.
When the property is acquired during the year, the charge must be paid within 30 days of the acquisition date. For a new build, the company has 90 days to pay from the date the local council issues a completion notice.
Properties which are commercially let, held for development, used by a charity or used to house employees may all qualify for an exemption or relief from ATED. In those cases, the company must submit an ATED relief declaration form by 30 April. Late forms will trigger penalties.
HMRC can easily check which companies own residential properties by searching the Land Registry.