ATED is an annual tax payable mainly by companies and partnerships with a corporate member that own UK residential property, which started to apply from 01 April 2013. It applies to properties valued in excess of £500,000 from 01 April 2016 onwards. 

From the 01 April 2018, the valuation date has been 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. This valuation date lasts until 1 April 2023. 

The amount to pay is worked out using a banding system based on the value of the 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 and tax paid by 30 April 2022 are for the period 01 April 2022 to 31 March 2023 (2022/23 ATED returns) and the charges are as follows:

The returns due for submission and tax paid by 30 April 2022 are for the period 01 April 2022 to 31 March 2023 (2022/23 ATED returns) and the charges are as follows:

Property value                                                                 2022/23 Annual charge

More than £500,000 but not more than £1 million            £3,800

More than £1 million but not more than £2 million            £7,700

More than £2 million but not more than £5 million            £26,050

More than £5 million but not more than £10 million          £60,900

More than £10 million but not more than £20 million        £122,250

More than £20 million                                                       £244,750

A new valuation will be required for 2023/24 ATED returns. Residential properties caught under the ATED regime must be revalued on 1 April 2022. This value will then apply to ATED returns for the next five chargeable periods (starting from 2023/2024). With house prices having increased significantly since 2017, it is likely that more properties will come within the scope of the ATED charge. 

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 

We see many companies who make the mistake of believing a return is not due because of these reliefs. However, a relief declaration still has to be submitted, which can be made using HMRC’s ATED online service. 

There are alsoate 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.