12 Mar 2019

Prepare for Tax on Enveloped Dwellings


The deadline for filing Annual Tax on Enveloped Dwellings ('ATED') returns and settling any charge arising for the period 1st April 2019 to 31st March 2020 is 30 April 2019.

The ATED is an annual tax charge that can apply to certain UK residential property owned by a company or collective investment scheme. The regime is based on the location of the property so charges can apply to both UK and non-UK resident entities.

As the name suggests, ATED is an annual tax charge and is based on the value of a property, When the charge was introduced, it applied to residential properties with a market value in excess of £2m on 1st April 2012 but the market value threshold has gradually decreased to £500,000 over the years. As if this wasn’t enough, there is a requirement to revalue properties every 5 years so if a residential property was not caught back in 2012, it will fall into the regime if its value exceed £500,000 at 1st April 2017 (the last revaluation date).

The ATED can apply to any UK residential property, although a few categories of properties such as hotels and student accommodation, are exempt from the charge. Relief from the charge can also be available where:

  • A company runs a property rental business on a commercial basis
  • A company runs a property development or property trading business
  • A company holds a farmhouse
  • A company holds Heritage properties open to the public for at least 28 days each year
  • Property is held for charitable purposes

Even if relief is available, the property owner is still required to file an ATED return to claim that relief. It is therefore likely that any company holding UK residential property valued in excess of £500,000 will need to complete and submit a form of ATED return.

The information provided above applies to property already held by a company. If a property worth more than £500,000 is acquired by a company at any time, an ATED return is required to be filed and any charge paid (or relief claimed) within 30 days of the acquisition date.

If you believe you might be affected by ATED and require assistance or advice, please get in touch with our corporate tax manager, Stephanie Hurst on 01793 818300 or send her an email