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The deadline for the Annual Tax on Enveloped Dwellings (ATED) filing is rapidly approaching

Block of flats - the Annual Tax on Enveloped Dwellings (ATED) is rapidly approaching

The deadline for filing the Annual Tax on Enveloped Dwellings (ATED) return is the 30th April each year. Companies that own UK residential property with a value in excess of £500,000 are required to submit a return, pay any tax due or claim relief for the period 1st April 2024 to 31st March 2025 no later than the 30th April 2024. Get in touch early with our team of tax specialists at RA Accountants if you have any questions about this year’s return.

What is the Annual Tax on Enveloped Dwellings (ATED)?

The annual tax on enveloped dwellings (ATED) is a payable by companies who own UK residential property. It was originally introduced in the 2013 Finance Act and was intended to discourage individuals from acquiring and holding high value UK residential properties principally through companies (hence the term “enveloping”). In 2013, these high value properties were considered as dwellings with a value of more than £2 million. However, over subsequent years, this threshold has been decreased significantly – now properties valued at more than £500,000 are liable to pay ATED.

Who needs to pay the Annual Tax on Enveloped Dwellings (ATED)?

Broadly, you will need to file an ATED return if your dwelling is currently valued at more than £500,000 and is owned by a:-

  • Company
  • Partnership, where any of the partners is a company
  • Collective investment scheme

What is a dwelling?

Your property is counted as a dwelling if it is used or could be used as a residence such as a house or a flat. However, there are some properties, such as student halls of residence, care homes and military accommodation that are not viewed as dwellings.

How much is the annual Annual Tax on Enveloped Dwellings (ATED) charge?

The ATED charge is based on a banding system and depends on the value of the property.

Annual ATED charge by value of property Annual charge
01.04.2023-
31.03.2024
Annual charge
01.04.2024-
31.03.2025
Property value
£500,000 or less Nil Nil
More than £500,000 and up to £1 million £4,150 £4,400
More than £1 million and up to £2 million £8,450 £9,000
More than £2 million and up to £5 million £28,650 £30,550
More than £5 million and up to £10 million £67,050 £71,500
More than £10 million and up to £20 million £134,550 £143,550
More than £20 million £269,450 £287,500

Is the value of my property updated?

Every 5 years, companies are required to revalue their dwellings. The 2023-2024 chargeable period was the last revaluation year: companies had to use the value of each property as at the 1st April 2022 for the new valuation figure (or as at the date of the purchase of the property if acquired after the 1st April 2022).

Are any dwellings exempt?

If you are exempt, you are not required to complete an ATED return. Exempt organisations include:-

  • Charitable companies using the dwelling for charitable purposes
  • Certain public bodies
  • Bodies established for national purposes

Are there any reliefs available?

There are a number of reliefs available that could reduce your ATED bill – for example, if you are a property developer developing a property with the intention of selling it or if you open the property to the public for at least 28 days each year. These reliefs can be claimed via the ATED online service.

How are recently acquired properties treated?

Should you buy a residential property that falls within the ATED requirements, you will have to prepare and submit a return within 30 days of acquisition.

Are there any penalties?

If you do not submit your ATED return on time, are late paying or provide an inaccurate ATED return you could be liable to pay a penalty and interest.

If you would like to discuss the Annual Tax on Enveloped Dwellings (ATED) filing, please do get in touch with the team of tax specialists at RA Accountants. We would be very pleased to hear from you.

For further information about Annual Tax on Enveloped Dwellings (ATED)

Gov.uk Website: Annual Tax on Enveloped Dwellings (ATED)
Gov.uk website: Annual Tax on Enveloped Dwellings: work out the value of your property
Gov.uk website: Annual Tax on Enveloped Dwellings: reliefs and exemptions
Gov.uk website: Annual Tax on Enveloped Dwellings (ATED): technical guidance

Disclaimer;
The information provided on this web site is of a general nature. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from a professional accountant before you take any action or refrain from action. Whilst we endeavour to use reasonable efforts to furnish accurate, complete, reliable, error free and up-to-date information, we do not warrant that it is such. We and our associates disclaim all warranties. The information can only provide an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice.