Tag Archives: ATED

Looking forward to ATED


If you own residential property in a company and its worth more than £500,000, then you may need to comply with the Annual Tax on Enveloped Dwellings (ATED) rules.

The rules require an annual tax return to be submitted by 30 April covering the forthcoming year.  The ATED charge for the forthcoming year must also be paid on that date.

Who needs to file an ATED return?

ATED returns must be filed and an ATED charge paid every year by non-natural owners of residential properties located in the UK, where the property is worth more than £500,000, and one of the reliefs or exemptions has not been claimed for the property.

A non-natural person can be defined as one of the following:

–       Any company wherever it is registered;
–       A partnership where one or more of the partners is a company;
–       A collective investment scheme.

There are exemptions from the charge, for example for properties which are commercially let, but there is still a requirement to submit the annual ATED return and claim the exemption, even if you have nothing to pay.

The rates

The new rates have recently been revealed for the chargeable year beginning 1 April 2017. The charge for the period will need to be paid by 30 April 2017.

Property value £ 2016/17 £ 2017/18 £
500,001 – 1,000,000 3,500 3,500
1,000,001 – 2,000,000 7,000 7,050
2,000,001 – 5,000,000 23,350 23,550
5,000,001 – 10,000,000 54,450 54,950
10,000,001 – 20,000,000 109,050 110,100
Over 20,000,000 218,200 220,350

The valuation band is determined by the properties’ market value as at 1 April 2012. If the owner acquired the property since that date, the value to use is the open market value at the date of acquisition.

If the property falls within 10% of a valuation band, the owner can apply to HMRC for a pre-return banding check. These checks can take at least 30 days to process, so it is best to apply as soon as possible.

For more information on ATED or if you’re worried about the above rates, please get in touch with our tax team by emailing tax@pmm.co.uk or by calling 01254 679131.


Annual Tax on Enveloped Dwellings (ATED)

shutterstock_198210140ATED applies an annual tax charge to UK residential properties owned by companies or partnerships with corporate members.

The amount of ATED is worked out using a banding system based on the value of the property – starting from £7,000 for properties valued at between £1m and £2m and increasing all the way up to £218,200 for properties worth over £20m.

Your company will need to complete an ATED return if the property was valued at more than £1m on 1 April 2015 or at a subsequent acquisition date.

From 1 April 2016, a further band will come into effect for properties with a value in the £500,000 – £1m range.

The ATED return is due to be filed by the end of April 2015 for the 2015-16 financial year and the tax must also be paid then.  This filing and paying at the start of the year can catch people out.

However, for the 2015 to 2016 chargeable period, ATED returns for properties falling within the new £1 million to £2 million band are due by 1 October 2015 and payment by 31 October 2015. This is instead of the normal filing date of 30 April 2015.

There are reliefs available to exempt companies from the ATED charge, for example if the property is let to 3rd parties.  It is important to note that you will still need to complete an ATED return to claim the relief.

There are also a number of exemptions from the tax, most significantly for charitable companies using the property for their charitable purposes.  No return is required by these companies.

From a practical perspective, when making your payment, you will need to apply for an ATED payment reference number which can take up to 10 days to receive.  So, whilst there is still time, if you need to pay, you will need to act quickly.

Penalties apply for late filing and late payment so if you are unsure as to whether these rules apply please do get in touch as soon as possible – either email tax@pmm.co.uk or call 01254 679131 and ask to speak to Julie Walsh.