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ATED vs BIK

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Hi there

One of my clients runs a property trading Ltd company. He is considering buying a second residence as an investment property through the company. My question is, as he will be declaring a BIK charge on the property (due to him being director and shareholder, and occasionally staying there himself), is ATED still payable on the property? The property in question is worth over £500k. And if ATED is still payable, can BIK be avoided if he were not using the property at all?

Thank you in advance for your help!

 

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By paul.benny
06th Aug 2020 11:35

Guidance here:
https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics

I vote no, but there's not enough information in your post to determine whether the exemptions might apply.

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Replying to paul.benny:
Psycho
By Wilson Philips
06th Aug 2020 12:08

Is that "no" to both questions?

I vote "yes" to the first, "no idea" to the second (due to lack of useful information).

And that's me done - I have no inclination to tease further details out of the OP (and as previously noted we have been discouraged from doing so).

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By Tax Dragon
06th Aug 2020 12:23

The only thing that I thought seemed clear was that the OP did not want to provide further information (clue: posted as anonymous) - irrespective of the current forum code of conduct.

Absent more information, neither question can be answered with certainty. Being as polite and helpful as I can be, I am not aware of any interaction between ATED and BIK charges and see no reason why both would not apply. (A correct use of double negatives, by the way.)

But lack of information and signalling (by posting anonymously) a lack of intent to supply more is not a good opening combination. I'm out. (Middle stump.)

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Replying to Wilson Philips:
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By paul.benny
06th Aug 2020 12:58

Fair point (about my no).

Confession - I didn't recognise the initials ATED. That said, 0.37 seconds of internet search not only spelt out the full words but gave me the pages on gov.uk explaining the rules. And a link to the ATED helpline.

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By Vishal Mandavia
06th Aug 2020 13:44

Hi thanks for your replies. To be clear, I just wanted to check if ATED is still payable if BIK is already being declared on the property and income tax and NIC being paid on that.

I understand that if the property was held as stock with the intention of resale then ATED would not be payable. But in this case the property is being held as a long term investment and being used by the director/shareholder as a second residence from time to time.

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Replying to Vishal Mandavia:
Psycho
By Wilson Philips
06th Aug 2020 13:59

Duplicate

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Replying to Vishal Mandavia:
Psycho
By Wilson Philips
06th Aug 2020 13:59

The point has been made that ATED and BIKs are not mutually exclusive.

You could have:

ATED no BIK
BIK no ATED
Neither ATED nor BIK
Both ATED and BIK

You need to consider the rules for each and consider whether they apply in the given circumstances.

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