Detailed guide: Annual Tax on Enveloped Dwellings

Updated: Section added on penalties and appeals.

Overview

ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.

You’ll need to complete an ATED return if your property:

  • is a dwelling
  • is in the UK
  • was valued at more than:
    • £2 million on 1 April 2012, or at acquisition if later, for returns from 2013 to 2014 onwards
    • £1 million on 1 April 2012, or at acquisition if later, for returns from 2015 to 2016 onwards
    • £500,000 on 1 April 2012, or at acquisition if later, for returns from 2016 to 2017 onwards
  • is owned completely or partly by a:
    • company
    • partnership where one of the partners is a company
    • ­collective investment scheme – for example a unit trust or an open ended investment vehicle

Returns must only be submitted on or after 1 April in any chargeable period.

There are reliefs and exemptions from the tax, which may mean you don’t have to pay.

Meaning of ‘dwelling’

Your property will be a dwelling if all or part of it is used, or could be used as a residence, for example a house or flat. It includes any gardens, grounds and buildings within them.

Find out about valuing different types of properties for example mixed use, more than one dwelling and multiple interest properties.

Some properties aren’t classed as dwellings. These include:

  • hotels
  • guest houses
  • boarding school accommodation
  • hospitals
  • student halls of residence
  • military accommodation
  • care homes
  • prisons

Section 19 of the ATED technical guidance explains more about the meaning of ‘dwelling’.

Value your property

To work out what you need to pay you’ll need to value your property.

In some circumstances you can also ask HM Revenue and Customs (HMRC) for a Pre-Return Banding Check (PRBC).

What you need to pay

The amount you’ll need to pay is worked out using a banding system based on the value of your property.

Chargeable amounts for 1 April 2017 to 31 March 2018

Property value Annual charge
More than £500,000 but not more than £1 million £3,500
More than £1 million but not more than £2 million £7,050
More than £2 million but not more than £5 million £23,550
More than £5 million but not more than £10 million £54,950
More than £10 million but not more than £20 million £110,100
More than £20 million £220,350

Chargeable amounts for 1 April 2016 to 31 March 2017

Property value Annual charge
More than £500,000 but not more than £1 million £3,500
More than £1 million but not more than £2 million £7,000
More than £2 million but not more than £5 million £23,350
More than £5 million but not more than £10 million £54,450
More than £10 million but not more than £20 million £109,050
More than £20 million £218,200

Chargeable amounts for 1 April 2015 to 31 March 2016

Property value Annual charge
More than £1 million but not more than £2 million £7,000
More than £2 million but not more than £5 million £23,350
More than £5 million but not more than £10 million £54,450
More than £10 million but not more than £20 million £109,050
More than £20 million £218,200

Chargeable amounts for chargeable period 1 April 2014 to 31 March 2015

Property value Annual charge
More than £2 million but not more than £5 million £15,400
More than £5 million but not more than £10 million £35,900
More than £10 million but not more than £20 million £71,850
More than £20 million £143,750

Chargeable amounts for chargeable period 1 April 2013 to 31 March 2014

Property value Annual charge
More than £2 million but not more than £5 million £15,000
More than £5 million but not more than £10 million £35,000
More than £10 million but not more than £20 million £70,000
More than £20 million £140,000

Section 6 and 7 of the ATED technical guidance tells you more about how to work out the charge if:

  • you only own the dwelling for part of a year
  • you claim a relief for part of the year

When you buy your property you may also have to pay Stamp Duty Land Tax. There’s a higher rate for corporate bodies.

If you sell your property you may also have to pay ATED-related Capital Gains Tax.

Submit your return and pay

You can use the ATED online service to submit your return and appoint an agent.

You’ll then need to pay anything you owe.

Other ways to submit your return

If you’re unable to use the new ATED online service, you can access the old return or the Relief Declaration Return through the Returns Notice.

Penalties and appeals

Penalties

You could be charged a penalty and interest if:

Appeals

If you disagree with an HMRC decision about your return, for example a penalty or determination, you may be able to challenge it by appealing.

You have 30 days from the date of the decision to write and tell HMRC the grounds on which you’re appealing.

Write to:

ATED Processing Team

5th Floor

Crown House

Birch Street

Wolverhampton

WV1 4JX

Get help

If you need any help or further information you can call the ATED helpline.

Source: HMRC

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