Do I need to pay the ATED tax charge?

The Annual Tax on Enveloped Dwellings (known as “ATED”) is a tax which applies to companies and certain other entities which own a UK dwelling (residential property) valued at £500,000 or more.

An ATED return could be required if a property is a UK dwelling, was valued at more than £500,000 at the relevant valuation date, and is owned completely or partly by a;

  1. Company
  2. Partnerships with at least one corporate member
  3. Collective investment scheme

How Much is the Tax Charge?

Generally, the amount of tax due depends on the value of the dwelling. Dwellings worth less than £500,000 are exempt from ATED. Properties worth more than £500,000 will face a charge as detailed in the table below:

So, when do I have to pay this by?

Returns must be submitted by 30 April of each tax year, and are submitted in advance of the period. As an example, for the 2024/25 tax year, the ATED return will be due by 30 April 2024. Any tax due must also be paid on the same day.

Are there any reliefs available to reduce this tax charge?

The good news is that a lot of residential properties are eligible for relief from the ATED tax charge – but an ATED return is normally required to claim the relief from the charge! For example, relief may be claimed for properties that are let out as part of a property rental business on an arm’s length basis, or property development business.

Revaluation of ATED Properties

The value of the property for ATED purposes is the open market value at the later of:

  1. The date of acquisition
  2. The revaluation date

The revaluation date is a fixed date that falls every five years. The last revaluation date was 1 April 2022, which will be applied to the 2024/25 tax year. The next revaluation date will be on 1 April 2027.

How can we help?

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. You can contact us online or by calling us on 01903 234094.