Annual Tax on Enveloped Dwellings (“ATED”).

What is ATED?

  • From 1 April 2013, an annual tax charge has applied to “high-value” UK residential property owned by certain “non-natural persons”. This is known as the Annual Tax on Enveloped Dwellings (“ATED”) charge.
  • The change broadly applies to UK residential properties which are worth more than £0.5m.

Returns and payment

Where an ATED charge applies, a Tax Return and the associated payment will be usually required by 30 April in the year for which the charge applies, i.e. 30 April 2020 for the period 1 April 2020 to 31 March 2021. Different rules apply where e.g. a property is acquired part-way through a year, however. Penalties and interest apply where payment and or filing dates are missed.

Certain categories of buildings, e.g. hotels, guest houses and care homes are not classified as dwellings, so don’t fall within the ATED regime, and a number of further reliefs (most notably for commercial lettings and development activity) may be claimed. At present, these can only be claimed by completing and submitting an ATED Tax Return.

Rate bands

The current ATED charges are set out below.

Property Value2017-182018-192019-20
£500,000 to £1,000,000£3,500£3,600£3,650
£1,000,001 to £2,000,000£7,050£7,250£7,400
£2,000,001 to £5,000,000£23,550£24,250£24,800
£5,000,001 to £10,000,000£54,950£56,550£57,900
£10,000,001 to £20,000,000£110,100£113,400£116,100
£20,000,001 and over£220,350£226,950£232,350

Valuation of property

The valuation used for the first 5 ATED return periods beginning 1 April 2013 will usually be the valuation at 1 April 2012, or at the date when the property was acquired it, if later. All properties which are subject to ATED will need to have been revalued again at 1 April 2017, and this valuation will then apply for to ATED returns for the five year periods starting on 1 April 2018.  The next valuation date will be 1 April 2022.

Valuation is a principally a matter of self-assessment, although a professional valuation can of course be sought as appropriate.

How we can help

We can help with the following:

  • Assessing whether your dwelling is subject to ATED
  • Registration and filing of ATED returns
  • Advising on possible restructuring to take a property out of the ATED charge
  • Tax efficient structures for acquiring UK property interests and for UK property businesses

Please contact us to speak to an advisor about the ATED regime and how it may affect you.