Annual Tax on Enveloped Dwellings (ATED) – Does your company have an obligation to file a return this month?

09 April 2021

What is ATED?

ATED is an annual tax payable by companies and other non-natural persons who own an interest in UK residential property valued at over £500k.

The charge applies to houses, self-contained flats, gardens and mixed-use properties. Certain properties such as hotels, guest houses and care homes are specifically excluded.

ATED also extends to property developers and letting businesses but there are reliefs available to reduce the ATED charge to nil. For example, a claim for relief can be made where a property is rented on a commercial basis to an unconnected party. It is important to note that the claim for relief is not automatic and a Relief Declaration Return must be submitted to HMRC in order to make the claim.

What are my compliance obligations?

ATED returns are required for the period to 31 March each year. The current period runs from 1 April 2021 to 31 March 2022. The return must be submitted to HMRC by 30 April 2021. Any tax payable is also due by this date.

How much is the ATED charge?

The charges for ATED are based on property value, and the charge will depend on which band your property falls into. The valuation of the property is based on the open market value at 1 April 2017, or the value at the date of acquisition if later. The property should then be valued every 5 years in order for companies to consider if they are still liable for the charge from 1 April 2022 onwards.

Property Value

2021/22

£500,001 - £1,000,000

3,700

£1,000,001 - £2,000,000

7,500

£2,000,001 - £5,000,000

25,300

£5,000,0001 - £10,000,000

59,100

£10,000,001 - £20,000,000

118,600

Exceeding £20,000,000

237,400

 

How can AAB assist me?

We can advise on ATED for those affected and assist with the submission of ATED returns. If you have any queries or would like further information on ATED please do not hesitate to contact Annmarie Dundas or your usual AAB contact.

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