The Annual Tax on Enveloped Dwellings (ATED) was introduced in 2013 to deter corporate structures from holding property, which could be considered a dwelling for the benefit of connected persons, by imposing a fixed annual charge based on the value of the property.
You will need to complete an ATED return in the following situation:
- A UK property is owned in whole or in part by a company or collective investment scheme and
- The value of the property at 1 April 2017 (or purchase date if later) is £500,000 or more.
There are several exemptions that could apply, reducing the annual charge to £nil. The most common of these are for properties let to an unconnected third party or held as trading stock in a property development business. Please note that if exemptions apply, an ATED return should still be prepared.
If exemptions do not apply and an ATED charge is due, the rates for 2019/20 are as follows:
|Property value||Annual charge|
|More than £500,000 up to £1 million||£3,650|
|More than £1 million up to £2 million||£7,400|
|More than £2 million up to £5 million||£24,800|
|More than £5 million up to £10 million||£57,900|
|More than £10 million up to £20 million||£116,100|
|More than £20 million||£232,350|
Please note the property value currently used should be at 1 April 2017 (or purchase date if later). This valuation should be used for five years, meaning the next revaluation will be needed at 1 April 2022.
The filing and payment deadline for your 2019/20 ATED return is 30 April 2019.
If a property is owned for part of the year and falls within the ATED regime, a return should be submitted within 30 days of acquisition or for new build properties, within 90 days of the earliest of first occupation or first becoming a dwelling for Council Tax purposes.
A repayment can be claimed if the property is ‘de-enveloped’ within the year to prorate the charge for the period of ownership.
If you think you could be affected by ATED, please do not hesitate to contact us at DRG Chartered Accountants to talk to our team of tax specialists.
For further information
Guidance: Annual Tax on Enveloped Dwellings
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.