ATED is an annual tax charge for companies owning expensive UK residential properties.
The Annual Tax on Enveloped Dwellings (ATED) was introduced from 1 April 2013 and requires certain non-natural persons, including companies, partnerships with at least one company member and collective investment schemes, to pay an annual charge if:
- They own UK residential property; and
- The market value of the property is more than £500,000 on the “Valuation Date” for the property.
ATED is self-assessed meaning that if you fail to comply HMRC may charge interest and penalties. If you are the beneficial owner, a shareholder, a partner or an administrator of a company or partnership that may be affected, contact us so that we can advise you on complying with the requirements.
The valuation date applicable to a property for an ATED period (annually from 1 April to 31 March) is either:
- The ‘standard’ valuation date – initially the valuation date was 1 April 2012, with a revaluation being required on each 5 year anniversary (1 April 2017, 1 April 2022 etc.). This does not apply to the year in which the date falls, so the 1 April 2017 valuation will first apply for the ATED period from 1 April 2018 to 31 March 2019.
- If later than the standard valuation date, the value on the date of purchase or part disposal of the property is used.
The valuation is self-assessed meaning that you will be required to value the property either personally or with professional help and that HMRC could charge penalties if they decide to look at the valuation and find that it is incorrect. HMRC will undertake Pre-Return Banding Checks (PRBC) for those who reasonably believe that their property valuation falls within 10% of a band threshold.
The amount payable depends on the rate band that the property falls within:
|Property Value||Charge for 2017-18||Charge for 2018-19|
|£500,000 to £1 million||£3,500||£3,600|
|£1 million to £2 million||£7,050||£7,250|
|£2 million to £5 million||£23,550||£24,250|
|£5 million to £10 million||£54,950||£56,550|
|£10 million to £20 million||£110,100||£113,400|
Reliefs are available in some cases to reduce these amounts. For example, relief may be available where the property is let out to unconnected parties on a commercial basis, is part of a letting business or a property development business, or is open to the public for 28 days per year etc. Please contact us if you would like full details of the ATED reliefs available.
Each ATED return period runs from 1 April to 31 March. Completed ATED returns must be submitted to HMRC by 30 April at the beginning of each ATED period. For example, the return for the year from 1 April 2018 to 31 March 2019 must have been submitted by 30 April 2018. Payment of the charge is also due by this date. If a property first falls within the ATED system during a period, the return and payment are due within 30 days if the property was purchased, or 90 days if the property was newly built.
If the property falls into one of the categories of relief from ATED, you still have to complete a return each year to claim the relief.
If you are unsure of whether you are caught by the ATED rules, if you need help with completing the self-assessment procedure or if you would like to know more about the reliefs that are available, please contact Tax Innovations on 01962 856 990 or firstname.lastname@example.org.
For more information ATED please call us on 01962 856 990 or visit our contact page.