HMRC published its latest stamp taxes bulletin on 6 March. This edition includes articles on the ATED charge and ATED related capital gains tax. Helpfully this includes a link to a new ATED agent authorisation form: ATED 1. The form allows taxpayers to authorise their agents to correspond directly with HMRC. This is needed because the usual agent authorisation form which covers most taxes – the ‘64-8’- does not cover the ATED charge or ATED related gains.
Less helpfully, the guidance fails to address some key pitfalls associated with the charge, particularly the possibility of triggering a taxable remittance on the payment of the charge (see http://www.gabelletax.com/blog/2013/10/25/paying-ated-avoid-those-pitfalls/) – and those seeking to pay the charge will always need to consider how to fund the payment in a tax neutral manner.
The guidance also fails to give any further clarification around the very difficult area of de-enveloping where a property is subject to a charge or debts. In December 2013 HMRC issued a particularly unhelpful statement asserting that could be an SDLT charge on de-enveloping where prior steps were taken to repay debt but without giving no clear guidance on what would and what would not be caught.
The ATED return for 2014/15 is due on 30 April and it should be remembered that even if relief from the charge is available – where for example the property is commercially let to a third party – a return must still be filed.
For assistance with de-enveloping, filing an ATED return and paying the charge please contact Priya Dutta on 0845 4900 509.