Annual Tax on Enveloped Dwellings (ATED) Rate Changes
ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.
You will need to complete an ATED return if your property is a UK dwelling and was valued at more than £500,000 and is owned completely or partly by a:
- partnership where any of the partners is a company
- collective investment scheme – for example a unit trust or an open ended investment vehicle
Separate Returns for each affected property must be submitted annually between 1 April and 30 April. In addition, when property first comes within the ATED regime a Return must be submitted within 30 days.
There are reliefs and exemptions from the tax, which may mean you do not have to pay. In particular companies renting properties to third parties and those involved in property development or trading can claim relief from the tax charge. A Return must be submitted to claim these reliefs.
The ATED charges automatically increase each year in line with inflation based on the previous September’s Consumer Price Index (CPI).
The ATED annual charges will rise by 3.1% from 1 April 2022 in line with the September 2021 CPI. This table shows the property band and what the revised charges will be for the 2022 to 2023 chargeable period.
|Taxable value of the property||Charge for tax year 2021/22||Charge for tax year 2022/23|
|£500,001 to £1,000,000||£3,700||£3,800|
|£1,000,001 to £2,000,000||£7,500||£7,700|
|£2,000,001 to £5,000,000||£25,300||£26,050|
|£5,000,001 to £10,000,000||£59,100||£60,900|
|£10,000,001 to £20,000,000||£118,600||£122,250|
|£20,000,001 and over||£237,400||£244,750|
Revalue ATED properties at 1 April 2022
The value of the property for any chargeable period is the open market value at the later of:
- the date of acquisition
- the revaluation date
In order to calculate the ATED charge the property needs to be revalued every 5 years and the next revaluation date is 1 April 2022. As residential property has increased significantly in recent years this may bring more companies owning residential property within the ATED charge.
Please contact Alan Rolfe on 023 8046 1235 if you have an ATED property and we will assist you with working out the charge and submitting the required Returns.