Does the Annual Tax on Enveloped Dwellings affect you?

Annual Tax on Enveloped Dwellings (ATED) is an annual tax charge which can apply if a UK residential property valued at over £500,000 is owned by a company or other non-natural person(s).

You will need to complete an ATED return if your property is a UK dwelling and was valued at more than £500,000 and is owned completely or partly by a:

  • Company
  • Partnership where any of the partners is a company
  • Collective investment scheme – for example a unit trust or an open-ended investment vehicle

When is the tax due?

Returns must be submitted and tax paid (where applicable) by 30 April of each tax year.  There are reliefs and exemptions from the tax, which may mean you do not have to pay.

The ATED charges automatically increase each year in line with inflation (based on the previous September’s Consumer Price Index (CPI)).

How much is it going up by?

The ATED annual charges will rise by 3.1% from 1 April 2022 in line with the September 2021 Consumer Price Index. This table shows the property band and what the revised charges will be for the 2022 to 2023 chargeable period.

Taxable value of
the property
Charge for tax year
Charge for tax year
£500,001 to £1,000,000£3,700 £3,800
£1,000,001 to £2,000,000£7,500 £7,700
£2,000,001 to £5,000,000£25,300 £26,050
£5,000,001 to £10,000,000£59,100 £60,900
£10,000,001 to £20,000,000£118,600 £122,250
£20,000,001 and over£237,400 £244,750

Note that there are numerous exemptions and reliefs from ATED. In particular, companies renting properties to third parties and those involved in property development may be eligible for relief.

Revalue ATED properties at 1st April 2022

The value of the property for any chargeable period is the open market value at the later of:

  • the date of acquisition
  • the revaluation date

In order to calculate the ATED charge the property needs to be revalued every 5 years.

The last revaluation date was on 1 April 2017 and this valuation will continue to apply for the 2022/23 tax year.

The next revaluation date is 1 April 2022, which will be applied from the 2023/24 tax year. As residential property has increased significantly in recent years this may bring more companies owning residential property within the ATED charge.

Please contact us at Carpenter Box if you have an ATED property. We can assist you with working out the charge and submitting the required return. Get in touch online, or by calling us on 01903 234094.

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