ATED stands for ‘Annual Tax on Enveloped Dwellings’. It mainly applies to companies that own UK residential properties.

A company must complete an ATED return if it owns a property that is:

• A ‘dwelling’ – can be used as someone’s permanent home
• In the UK
• Valued at more than £500,000 (for returns from 2016 onwards).

ATEDs also apply to partnerships if any of their partners is a company. Collective investments schemes such as unit trusts must also complete ATED returns if they own any relevant properties.

The amount of ATED you must pay each year depends on the value of the property. For the 2018-2019 tax year, ATED starts at £3,600 for properties worth £500,000-£1,000,000 and goes up to £226,950 for properties worth more than £20,000,000.

You revalue your property every five years to make sure that your ATED payments are accurate and up-to-date. HMRC can challenge your valuation and charge penalties and interest if it’s wrong.

FATCA, or the Foreign Account Tax Compliance Act, is American legislation that is intended to prevent United States taxpayers evading tax by holding investments in offshore accounts.

U.S. taxpayers that hold foreign assets valued over a certain threshold must report financial information about these assets along with their annual tax return. This threshold is:

• £50,000 if you live in the US and are unmarried or file taxes separately from your spouse
• £100,000 if you live in the US and file taxes jointly with your spouse filing jointly
• £200,000 if you live abroad and are unmarried or file taxes separately from your spouse
• £400,000 if you live abroad and file taxes jointly with your spouse.

You’ll be fined $10,000 if you fail to report foreign assets on your FATCA return, which increases to $50,000 if you still don’t comply after IRS notification. You’ll also receive a 40% penalty on any underpaid tax relating to your undisclosed assets.

There are a number of exceptions to the assets that you must report, such as what the IRS calls ‘Specified Foreign Financial Assets’. Our solicitors can advise whether or not you can take advantage of these exceptions – call us on 0370 1500 100 to find out more.

The Common Reporting Standard (CRS) is a standard for automatic tax and financial information exchange between different countries. It is designed to help combat tax evasion.

All financial institutions that operate in participating countries must report certain customers’ financial information to local tax authorities. This applies to people, companies, trusts and other financial entities.

This means that banks and other financial service providers may ask you to provide certain details about yourself if you appear to be tax resident in another country. This usually happens when you sign up for a service but you might be asked to update your information if they believe that your circumstances have changed.

Most countries tax you differently depending on whether you’re considered ‘tax resident’ or not.

Tax residence is a slightly different concept to actual residence. This means that you might legally be a tax resident somewhere even if you don’t consider it your home.

Each country has different laws to decide if you’re tax resident based on:

• How long you’re in the country
• Where your family live
• Where you work
• If you own a home in the country
• How much money and assets you own in the country.

The different tax laws in different countries can sometimes conflict, which could mean that you’re tax resident in multiple countries or that you pay tax on the same income twice.

It’s important to plan your tax residence correctly to avoid situations like these – contact us today to find out how we can help.

Everyone has to pay UK tax on UK income but your tax residence determines whether you pay UK tax on foreign income and capital gains.

Normal UK tax residents pay UK tax on foreign income and capital gains and

Non-domiciled UK tax residents don’t pay UK tax on foreign income or capital gains if

• They’re less than £2,000 in the tax year
• They’re kept them out of the UK and claim the remittance basis.

Non-residents don’t pay UK tax on any foreign income. They only pay capital gains tax:

• On UK residential property
• If they have previously had UK tax residence and become UK tax resident again.