ATED is an annual tax payable by companies that own UK residential property valued at more than £500,000.
The 1 month window for submitting ATED returns for companies owning residential properties which meet the ATED criteria is almost upon us. This year (being 2023/24) is also a revaluation year, which means that any ATED charge is based on the value of the property at 1 April 2022 or on the date of acquisition if later. We anticipate that, due to increasing property prices over recent years, many dwellings owned by companies which were previously valued below £500k will now be brought into the ATED regime.
An ATED return is only required if the property:
- is a dwelling
- is in the UK
- was valued at more than: £500,000 on 1 April 2022 or was purchased for more than £500,000 after 1 April 2022.
- is owned completely or partly by a:
- company
- partnership where any of the partners is a company
- collective investment scheme – for example a unit trust or an open ended investment vehicle
Entities exempt from ATED are:
- Charitable companies using the dwelling for charitable purposes
- Public bodies
Returns
Returns must be submitted on or after 1 April in any chargeable period. The deadline for filing is 30 April, therefore for the chargeable period 1 April 2023 to 31 March 2024, the return must be submitted between 1 and 30 April 2023.
Some properties are not classed as dwellings, and therefore an ATED return is not required. These include:
- hotels
- guest houses
- boarding school accommodation
- hospitals
- student halls of residence
- military accommodation
- care homes
- prisons
The ATED Charge
The tax charged is based on the following banding system –
Chargeable Period – 1 April 2023 to 31 March 2024
| Property value | 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 |
Reliefs
An ATED relief declaration will need to be completed if the property fits any of the following criteria:
- let to a third party on a commercial basis (or where empty is actively being marketed to let on a commercial basis) and is not, at any time, occupied (or available for occupation) by anyone connected with the company
- open to the public for at least 28 days a year
- 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
- acquired under a regulated home reversion plan
- 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 or a qualifying housing co-operative
If the property qualifies for relief no payment is due.
Penalties
HMRC will charge penalties in respect of the late submission of ATED returns (even when there is full relief available) and also for late payments.
Please contact a member of the Tax team should you require any further information or if you have any concerns that properties held within your company may now be caught by this regime.
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