Annual Tax on Enveloped Dwellings:
ATED (annual tax on enveloped dwellings) affects any company which holds residential property. It also impacts some other entities, such as partnerships with corporate partners, some trusts and certain collective bodies holding residential property.
The regime has only been with us since 2013, when properties valued at £2m and over were affected. More companies are now feeling the impact of the tax as properties valued at £500,000 and above came within the ATED regime from 1 April 2016.
What is the chargeable amount?
| Chargeable amounts for 2020-21 | |
| Property value | charge |
| More than £500,000 up to £1 million | £3,700 |
| More than £1 million up to £2 million | £7,500 |
| More than £2 million up to £5 million | £25,200 |
| More than £5 million up to £10 million | £58,850 |
| More than £10 million up to £20 million | £118,050 |
| More than £20 million | £236,250 |
Valuation and revaluation of ATED property:
Valuation date is latest of below
- 1 April 2012, or
- the date the property was purchased, or
- when the property becomes a dwelling.
There are fixed revaluation dates for all properties, every 5 years after 1 April 2012 The five-year revaluation cycle does not run from the date of acquisition of a property but from 1 April 2012, when ATED was introduced.
Which properties are not covered by this?
- Hotels
- Guest Houses
- Boarding School Accommodation
- Hospitals
- Student Halls of Residence
- Military Accommodation
- Care Homes
- Prisons
- Residential Property Owned by a Charity and Held for Charitable Purposes
- Properties Held by Public Bodies, and Bodies Established for National Purposes
- Properties Conditionally Exempt From Inheritance Tax
Relief from ATED:
There are various reliefs available against the ATED charge. However, even if you are eligible for one of these reliefs and there is no tax payable, you must still submit a return and make a claim for the relief by completing a Relief Declaration Return. Again, the deadline date for the submission of this return is 30 April of each period starting from 01st April.
Deadline for filling and payment:
- Returns under ATED need to be submitted by 30 April in the chargeable year. This is more than 11 months before the end of the relevant tax year
- In the year in which an ATED property is acquired, the return and payment are due within 30 days if purchased, or 90 days if the property is newly built.
Checklist for Applying ATED:
- Is the dwelling treated as non-residential?
- Is the dwelling below the £500,000 threshold?
- Is the entity or building itself specifically exempt from ATED?
- If none of the above applies, either an ATED return or relief declaration return is required from the company.
Penalties and Interest:
For Non-Filling or Late filling
- Initial penalty of £100 for the late submission of the return;
- Daily penalties of £10 per day, after your return is three months late.
- If the return is six months late, a further penalty of £300 or 5% of HMRC’s estimation of the liability to the ATED tax (whichever is higher) will apply
- further penalty of £300, or 5% of HMRC estimation of the liability to the ATED tax, (again, whichever is higher) will apply if the return is 12 months late.
For Late Payment
- For 30 days late payment, 5% of tax due
- For 6 Months delay, 5% of tax outstanding at that date
- For 12 moths delay, 5% of tax outstanding at that date
Services can be provided:
- Preparation and filing of the ATED return, ATED-related CGT return and Non-resident CGT returns
- Advising on ATED reliefs
- Advising on initial structuring of property purchases
- Advising on restructuring of property ownership
- Arranging for property valuations
Procedure:
- Check if the property is enveloped dwelling
- Claim any exemptions
- Register for the ATED online service.
- Once you complete the online registration, you’ll get a new ATED reference number This will be a 15-digit number beginning with the letter X, for example XLAT00000123456, and will be displayed on the home page of the ATED service.
- Claim the reliefs available
- Submit the relief claim forms, if refills are claimed
- Complete and submit the online ATED Return, if ATED is payable.
- Pay the ATED
If you have any query please feel free to call us on 020 3500 2646 or email us at
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