What is ATED?

The Annual Tax on Enveloped Dwellings (ATED) regime came into force on 1 April 2013 in respect of UK residential properties owned by companies or by corporate partnerships that were worth over £2 million. It was then extended to properties worth over £1 million from 2015 and to properties worth more than £500,000 from 2016.

The amount of the tax charge depends on the value of the property and now ranges from £3,700 up to a maximum of £236,250 across six bands of value determined by reference to a property’s value on 1 April 2017 or its actual cost if acquired after that date. The filing and payment date is 30 April. For instance, the ATED return for the year to 31 March 2022 and any tax due for the year should have been dealt with by 30 April 2021. It should be noted, when you purchase a property that falls within the ATED regime, the return will need to be prepared and submitted online to HMRC within 30 days.

There are a number of exemptions from the charge covering property rental businesses, developers, and dealers which must be claimed via an annual nil return.  Failure to submit such a claim in good time will unfortunately expose the company to penalties.

HMRC introduced a new online ATED filing service with effect from 1 April 2017 which became compulsory in April 2018 for the filing of 2018/19 and later returns. This involves a registration process, which we can assist with, and does allow for the appointment of an agent to file on behalf of a company.

Looking ahead, a revaluation exercise will also be required in due course when the ATED charges will be rebased to 1 April 2022 values.

For assistance and guidance on ATED returns or planning, please get in touch with us.

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