Annual Tax on Enveloped Dwellings

Annual Tax on Enveloped Dwellings (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 — find out the meaning of ‘dwelling’ in the next section
• is in the UK
• was valued at more than:
  • £2 million (for returns from 2013 to 2014 onwards)
  • £1 million (for returns from 2015 to 2016 onwards)
  • £500,000 (for returns from 2016 to 2017 onwards)
• 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

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

There are reliefs and exemptions from the tax, which may mean you do not have to pay.

Your property is 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 interests in properties.

Some properties are not classed as dwellings. These include:

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

Further information on valuing your property and working out what you need to pay can be found here Annual Tax on Enveloped Dwellings.

The reporting year is 1 April – 31 March.  The return must be filed by 30 April of the same reporting year and any ATED tax due must also be paid by this date.  This means that if the property is within the scope of ATED on 1 April 2024, you will be required to file a return for 1 April 2024 – 31 March 2025.  This return will be due to be filed by 30 April 2024.

For those new to the regime, if a new property comes within the scope of ATED after 1 April, a return needs to be filed within 30 days of acquisition.  Or, for a newly built property, it needs to be filed within 90 days of becoming a dwelling for Council Tax purposes or, of it first being occupied.

If you would like more information with regard to the above, please contact Katherine Van Eyken, either via e-mail on katherine.vaneyken@wardwilliams.co.uk or by calling 01932 830664.