ATED – is your property value above the threshold?

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 can read more about ATED here.

A new revaluation date occurred on 1 April 2017, which applies for the 31 March 2019 tax year. Therefore residential property which previously may have been exempt due to being below the threshold may now need to file an ATED return. Any company that held residential property as of 1 April 2017 will need to re-assess its value at that date to determine whether it is now above the threshold.

Reliefs available

Certain trades qualify for relief from the charge. For example, if the property is used as part of a property rental or development business then relief from the charge will be available. However, an ATED return is still required in order to claim the relief.

If during the year, stock is held in any residential properties valued at over £500,000, a return will also be required. Therefore if a residential property is constructed, converted or redeveloped and is subsequently worth more than £500,000 when complete, the company will be required to file a return.

The deadline for filing ATED returns for any existing properties is 30 April 2018 for the period 1 April 2018 to 31 March 2019. Furthermore, if a property acquired during the year (anytime from 1 April 2018 to 31 March 2019) an ATED return is required to be filed and any charge paid (if applicable) within 30 days of the acquisition date.

If you have any questions or are unsure if you need to file an ATED return, please contact Dan Hobbs, Tax Associate at MHA Carpenter Box on 01903 234094.

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