A general guide to the Annual Tax on Enveloped Dwellings (ATED)
As the name suggests, ATED is an annual tax charge on certain residential properties which are ‘enveloped’ within certain structures, including companies and partnerships with a corporate member and Limited Liability Partnerships. Where applicable, it is due for any day on which your organisation is entitled to the interest in a dwelling, and charges range from £3,800 for property valued between £500,000 and £1m to £244,750 for property valued at more than £20m.
How much has the value of your company’s residential property gone up in five years?
The most recent figures from the UK House Price Index showed an increase of more than 28% for detached properties in the East of England since April 2017, so that the average price for such a property is now £535,647*. This has important implications for corporate organisations who own residential properties which may be subject to the ATED charge as not only could properties within the charge go up a band, but other properties could exceed the £500,000 minimum band, potentially triggering reporting requirements for the first time.
Bonus vs dividends
Business owners often ask us whether they should be rewarded for the success of their company by way of either a bonus or dividend. As always, the answer is “It depends!” and, in most cases, there will need to be some calculations done to check the tax impact of either choice. However, tax is not necessarily the main driver, and this article sets out some general principles to consider before you get your calculator out. Where figures are quoted below, they refer to the 2022/23 tax year.
Basis period reform rules are delayed, but on their way
HMRC has delayed changing the rules for determining when business profits are taxed until 6 April 2023 but affected businesses will need to start thinking about the implications now. This article explains the new rules, based on the draft legislation.
Solicitors Accounts Rules Update
It is nearly two years since the Solicitors Accounts Rules were updated, and while the new rules have generally been well received, they have thrown up a couple of issues regarding client money which still require attention.
How could your farm benefit from speaking to one of our specialist accountants?
Our specialist Agricultural team are familiar with all the financial and practical issues faced by farmers. From small sole traders to large diversified landed estates, we work alongside our clients to ensure that they are supported to fulfil their potential.