Annual Tax on Enveloped Dwellings (ATED)

What is it?

• ATED is an annual filing and tax payment required by companies that own UK dwellings valued at more than £500k

• A dwelling is a property that can partially or wholly be used as a residence. The most common examples are house and flats

• Certain properties are not classified as dwellings which includes hotels, hospitals and care homes

• The amount of tax you pay each year depends on the value of the property and the tax year

• You must revalue your property every 5 years

Reliefs

• There are a number of reliefs that can be claimed, which can either partially reduce the amount of tax payable or fully reduce it to nil

• Common reliefs:

1. The company let the property to a third party on a commercial basis

2. The property is being developed for resale by a developer

3. The property is owned by a property trader, so the property is stock with the purpose of resale

It is important to note that even if you are able to receive a relief and do not need to pay any tax, if your company owns one of these properties, you are still required to file an ATED return each year.

Filing Requirements

• For each property that is liable to make an ATED payment, you must file a separate return per dwelling. For properties that attract relief, you can make one return for all dwellings that attract the same relief

• You are required to file your ATED return by the 30th April each year for that tax year, ie: the ATED return for 2023-24 is due by 30th April 2023

• The payment (if required) is also due by 30th April

• If an ATED property is purchased in a tax year, then you are required to make an ATED filing and payment within 30 days of the acquisition

• If an ATED property is disposed of part way through a tax year, then an amended ATED return can be filed to claim a refund for the remainder of the tax year which had already been paid