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Annual Tax on Enveloped Dwellings (ATED) - news article image

Annual Tax on Enveloped Dwellings (ATED)

26 Mar 2018

3 minute read

Now that the 31 January deadline has passed, we are busy planning towards 05 April, which perhaps most notably is the end of the personal tax year for many of our clients. However, many other returns will be due to be made up in this period, including those returns to report the Annual Tax on Enveloped Dwellings (ATED) to 31 March.

ATED is an annual tax payable mainly by companies that own UK residential property, which started to apply from 01 April 2013. In the first year, it only applied to properties valued in excess of £2 million but this has reduced overtime to a figure for returns from 01 April 2016 onwards of £500,000.

From the 01 April 2018, the valuation date is now 01 April 2017 for all properties unless they were acquired after 01 April 2017 in which case they are valued at the date of acquisition.

The amount you need to pay is worked out using a banding system based on the value of your property. If the property interest is held on the first day of the chargeable period (i.e. 1 April), the full amount of the annual chargeable amount as set out in the table below is due. If the property interest is acquired during a chargeable period, a proportion of the annual chargeable amount is payable.

The returns due for submission by 30 April 2018 are for the period 01 April 2018 to 31 March 2019 so the charges are as follows:


Property value 2018/19 Annual charge
More than £500,000 but not more than £1 million £3,600
More than £1 million but not more than £2 million £7,250
More than £2 million but not more than £5 million £24,250
More than £5 million but not more than £10 million £56,5000
More than £10 million but not more than £20 million £113,400
More than £20 million £226,950


There are reliefs from the tax, which may mean you do not have to pay. These include, but are not exclusive to your property being:

  • let to a third party on a commercial basis and is not, 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
  • being used by a trading business to provide living accommodation to certain qualifying employees

However, we see many companies who make the mistake of believing a return is not due because of these reliefs. A relief declaration still has to be submitted, which can be made using HMRC’s ATED online service. This is the first year that companies are required to file online; as this is the first year of HMRC’s new online filing system it is worth registering promptly to ensure that all are set up correctly in time to submit the return / relief claim.


There are a number of exemptions from ATED:
  • charitable companies using the dwelling for charitable purposes
  • public bodies
  • bodies established for national purposes 

If you meet the conditions for an exemption, you do not need to file a return. As so often the case, you could be charged a penalty and interest if you do not file your return on time or if you submit an incorrect return. At Shaw Gibbs, we have a specialist property team who are well versed in advising individuals and companies on how to protect their property investments in the most tax efficient manner.


Annual Tax on Enveloped Dwellings (ATED) - news article image

Contact Sarah Gardener, Director and Head of Property on +44(0) 1865 292 200 or sarah.gardener@shawgibbs.com

Author:

Sarah Gardener

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