The Annual Tax on Enveloped Dwellings (ATED) is an annual tax payable on residential property valued at more than £500,000 which is held by a company, a partnership or a collective investment scheme (such as a unit trust).
There are various reliefs and exemptions available. This may mean that there is nothing to pay.
Properties must be revalued every five years for the purposes of the ATED. The 2023/24 chargeable period is a revaluation period and tax due for this period is based in the valuation of the property at 1 April 2022. Where the property was acquired after 1 April 2022, the valuation at the acquisition date is used.
The chargeable amount is based on the value of the property. The amounts applying for the 2023/24 chargeable period (which runs from 1 April 2023 to 31 March 2024) are shown in the table below.
|Property value||2023/24 annual charge|
|More than £500,000 up to £1 million||£4,150|
|More than £1 million up to £2 million||£8,450|
|More than £2 million up to £5 million||£28,650|
|More than £5 million up to £10 million||£67,050|
|More than £10 million up to £20 million||£134,550|
|More than £20 million||£269,450|
There are a number of exemptions and reliefs from ATED.
The main relief is that which applies where the property is let on a commercial basis to a third party and is not occupied at any time by anyone connected to the owner. Corporate landlords letting residential properties valued in excess of £500,000 should be able to benefit from this relief.
Relief is also available in respect of properties owned by a property trader as stock of the business and held solely for the purpose of resale.
Full details of the exemptions and reliefs can be found on the Gov.uk website at https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-reliefs-and-exemptions.
Where a property is within the charge to ATED on 1 April 2023, the return for 2023/24 must be filed online using HMRC’s ATED online service by 30 April 2023. The ATED due should be paid by the same date. Where the property is acquired in the 2023/24 period, the return must be filed within 30 days of acquisition and the tax paid by the same date. For newly built properties, the deadline is 90 days from the earlier of the date that it becomes a dwelling for council tax or it is first occupied.
Partner note: FA 2013 Pt. 3 (ss. 94–174; Schs. 33–35).