ATED: what is it and how does it affect charities?
This is a tax that was introduced with effect from April 2013 and applies to companies (and similar kinds of structures) that own dwellings with an individual value of £2m upwards. The purpose of the tax was to eliminate any tax advantage in holding residential property in corporate ‘envelopes’ as distinct from the more usual holding of it in the name of individuals. This is an annual tax and runs alongside and in addition to the increased rate of Stamp Duty Land Tax (SDLT) on such ‘enveloped’ residential properties.
There is a charitable exemption from the tax. This does not extend to wholly owned subsidiaries of charities, since the company in question has to be ‘a charitable company’. In order to qualify for the relief, the charity must hold the interest for one of two purposes. Either it must be used for the furtherance of the charitable purposes of either the charitable company or of another charity (note, not its subsidiary) or held as an investment from which the profits will be applied to the holder’s charitable purposes. In other words, this is extremely similar to the familiar SDLT exemption for charities. It is clearly based upon that model.
There are anti-avoidance provisions aimed at ensuring that individuals do not give qualifying properties to charity only to continue to use them for their own residential purposes. This comes with detailed ‘related-party’ qualifications…
If you are registered and logged in to the site, click on the link below to read the rest of the Withers briefing. If not, please register or sign in with your details below.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from Withers
News from The Lawyer
Briefings from Withers
22 April 2014 marked ‘the largest reform of the family justice system any of us have seen or will see in our professional lifetimes’, according to the president of the Family Division.
Withers’ Graham Elliott discusses the points he found most interesting from this year’s Charity Tax Group annual meeting.
Analysis from The Lawyer
A merged Withers and Speechly Bircham would have scaled The Lawyer’s UK 200 with a turnover of about £170m, and created one of the world’s largest specialist private client teams. So what went wrong?