Landlord latest: company-owned rentals and holiday lets

In today’s ‘landlord latest’, we have news for owners of two different types of rental property. The first is for company-owned residential property landlords. The second is for owners of holiday lets.

Landlord latest 1: company-owned rentals

If your company owns one or more residential properties, you need to get them revalued every five years. This is because of the Annual Tax on Enveloped Dwellings rules. Broadly speaking, if a property is worth more than £500,000, you need to complete an ATED return and pay any tax due.

The government sets the years in which your properties need to be revalued. At the moment, you have about a month to get the revaluation done.

You can do the revaluation yourself or get a professional valuer to do it. The valuation must be based on what the property was worth on 1st April 2022, or the date of acquisition if it was bought after this date.

Submitting an ATED

If your residential property is worth more than £500,000, you need to submit your ATED and pay any tax due between 1st and 30th April 2023. If you don’t submit and pay on time, you face penalties and interest. You also face penalties if you submit an inaccurate return.

How much ATED do I have to pay?

The amount of ATED you have to pay depends on the value of the property. At the bottom end of the scale, if your property is worth between £500,000 and £1 million, you pay an annual charge of £4,150. In the middle range, properties worth £2 million to £5 million incur a charge of £28,650. At the top end of the scale, properties worth more than £20 million are hit with an annual rate of £269,450.

You can find full details of the ATED rates here.

ATED reliefs and exemptions

There are both reliefs and exemptions for ATED. For example, there are exemptions for certain charitable companies, public bodies and bodies established for national purposes.

There is a wider range of reliefs. Some examples of reliefs include:

• Properties open to the public at least 28 days annually
• Repossessed properties
• Farmhouses occupied by farm workers or former long-serving farm workers
• Properties being developed for resale.

You can find a full list of exemptions here.

Where do I submit my ATED?

You can submit your ATED here, or you can ask a THP accountant to do it for you. You can then pay any tax you owe here.

Landlord latest 2: holiday lets

The second update in this ‘landlord latest’ concerns people who own holiday rentals.

HMRC is currently ‘sending’ nudge letters to holiday let landlords it suspects are not paying enough tax.

Since the COVID pandemic boosted the popularity of UK-based vacations, many people have taken the opportunity to let out second homes as holiday lets. However, if you earn more than £1,000 per year from doing this, you need to tell the taxman via a Self-Assessment Tax Return.

If you’d like help making sure your tax affairs are in order, please do speak to one of our accountants. They’ll also be able to guide you through the complex changes to the rules relating to second homes. These come into force in April 2023.