Annual Tax on Enveloped Dwellings (ATED) – is your business affected?

Annual Tax on Enveloped Dwellings (ATED) – is your business affected?

If your company owns a UK dwelling, then under the Annual Tax on Enveloped Dwellings (‘ATED’) regime, you may now need to pay an annual charge.

If the residential property is worth in excess of £500,000 as at the revised valuation date – 1 April 2017 – which is now used to assess whether a charge is payable, then you will now have to file an ATED. This change in valuation date for the calculation of the annual chargeable amount from 1 April 2012 may well now see some properties’ values having increased significantly meaning they are now eligible for the charge under the regime.

The ATED system is a complex area of taxation and applies to UK dwellings which are ‘enveloped’, meaning it is owned or partly owned by a company, owned by a partnership with a corporate member or a unit trust.

If you think you may be caught by ATED, then you need to act quickly as the deadline to make a return and payment is 30 April 2017

How much is payable? 

The annual chargeable amount is by reference to the dwelling value. For the period beginning 1 April 2017 the amounts are based on the following dwelling values   Annual Chargeable Amount
£500,001 – £1m
£1m – £2m
£2m – £5m
£5m – £10m
£10m – £20m
More than £20m

Making a return

The ATED return for the 2017/18 tax year needs to be submitted by 30 April 2017 and can be made online via the HMRC website.

Alternatively, you can use the website to appoint CLB Coopers as your ‘agent’ to complete the return and make any payment due on your behalf.  You can find more details on how to do this via the link to the relevant section on the HMRC website.

If the ATED online service is unavailable, then the return can be made using the Returns Notice form.

If there is any tax due, then you can find details on how to make the payment here.

Available relief

Where a property incurs a charge under the regime, it may be possible to claim a relief, which needs to be claimed by the entity owning the property via the annual ATED return or declaration, and include:

  • let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected to the owner;
  • being developed for resale by a property developer;
  • owned by a property trader as the stock of the business for the sole purpose of resale;
  • repossessed by a financial institution as a result of its business of lending money;
  • being used by a trading business to provide living accommodation to certain qualifying employees;
  • a farmhouse occupied by a farm worker or a former long-serving farm worker;
  • owned by a registered provider of social housing;
  • open to the public for at least 28 days a year.

Each relief has its own set of detailed rules and complexities, so each will need to be considered in light of the individual set of circumstances.

Any claim for relief for the 2017/18 tax year needs to be made to HMRC by 30 April 2017. 

How we can help

For more information on the ATED regime, please get in touch with a member of our specialist Tax team or with your usual contact at CLB Coopers, who will be able to advise whether there is anything you need to do before the 30 April deadline.


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