HMRC is writing to taxpayers currently registered for the annual tax on enveloped dwellings (ATED) to remind them to revalue their properties on 1 April 2023 to avoid significant penalties.
An enveloped dwelling refers to a UK residential property held through a company, including those owned completely or partly by the company, partnership where any of the partners is a company, or collective investment schemes, and valued at more than £500,000. Valuation of the property is required to take place every five years in line with ATED legislation, with the 2023/24 chargeable period classed as a revaluation year. Companies must therefore use the valuation date of 1 April 2022 (or the date of acquisition if later) to revalue their properties.
For properties which are mixed-use e.g., residential, and non-residential, it is only necessary to value the residential element. However, for properties with more than one dwelling, such as self-contained flats, each flat will need to be valued separately.
For 2023/24, the tax charge starts at £4,150 for properties valued between £500,000 and £1million. Chargeable amounts for April 2023/24 can be found below:
|Property value||Annual charge|
|> £500,000 up to £1m||£4,150|
|> £1m up to £2m||£8,450|
|> £2m up to £5m||£28,650|
|> £5m up to £10m||£67,050|
|> £10m up to £20m||£134,550|
There are reliefs available to reduce chargeable amounts to nil. However, an ATED return will still need to be completed, along with a Relief Declaration return, and submitted online to HMRC by the due date to claim the relief.
Examples of when relief may be available include where the property is:
- let to a third party on a commercial basis and isn’t, at any time, occupied (or available for occupation) by anyone connected with the owner
- open to the public for at least 28 days a year
- being developed for resale by a property developer
- owned by a property trader as the stock of the business for the sole purpose of resale
- repossessed by a financial institution as a result of its business of lending money
- acquired under a regulated Home Reversion Plan
- being used by a trading business to provide living accommodation to certain qualifying employees
- a farmhouse occupied by a farm worker or a former long-serving farm worker
- owned by a registered provider of social housing
You could be charged a penalty, and interest, if:
- you do not file your return on time
- you do not pay on time
- you submit an inaccurate return
Get in touch
If you are unsure whether you a UK residential property you own falls under ATED rules, or need assistance submitting an ATED or Relief Declaration return, please speak to your usual PM+M adviser or get in touch by emailing email@example.com