13th March 2023
You must submit your Annual Tax on Enveloped Dwellings return in April if your company owns UK residential properties that are worth over £500,000. Before that, you must revalue it/them if you haven’t already done so. In addition to filing your ATED return to HMRC you must make any payments for the 2023 – 2024 period between 1 and 30 April 2023.
Important points to note about Annual Tax on Enveloped Dwellings
If your company owns UK residential properties that were previously worth less than £500,000 and could now exceed this threshold, you should also get a revaluation. If your revaluation shows your property/ies are worth more than £500,000 you must notify HMRC by completing an ATED return.
You must also file a return and pay for properties acquired in the year (30 days from date of acquisition) and those that were newly built in-year (see below for details).
You should only submit your return on or after 1 April for each relevant chargeable period.
As the ATED regime can be complex, contact us if you would like to discuss your company’s property.
What are the Annual Tax on Enveloped Dwellings rules?
ATED is an annual tax payable mostly by companies which own UK residential property valued at over £500,000.
You’ll need to complete an ATED return if your property:
- is a dwelling (see the government’s website for details).
- 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.
When to file your return
- by 30 April if your property is within the scope of ATED on 1 April.
- within 30 days of acquisition if your property comes within the scope of ATED after 1 April.
- for a newly-built property, 90 days from the date the dwelling comes into existence for Council Tax purposes or the date it was first occupied, if earlier.
Reliefs and exemptions
There are some circumstances when you may be able to claim reliefs and exemptions from ATED. A property might get relief if, for example, it’s let to a third party on a commercial basis and isn’t at any time occupied by the owner – or by anyone connected to the owner. More information is on the government’s website here.
Why do I have to revalue my residential property/ies now?
Under the government’s Annual Tax on Enveloped Dwellings (ATED) rules companies must revalue UK residential properties every five years. The 2023 – 2024 chargeable period is a revaluation year.
Revaluation can be carried out either by the owner or by a professional valuer and must be based on the value of the property on 1 April 2022, or on the date of acquisition if later. The good news is that, once you have a new valuation figure, this sets the rate of annual payment until the next revaluation year in five years’ time – you don’t revalue each year.
How will HMRC calculate my rate of annual payment?
The amount you’ll need to pay is worked out using a banding system based on the value of your property. See below but a full list of rates can be found on GOV.UK.
Chargeable amounts for 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 |
Chargeable amounts for 1 April 2022 to 31 March 2023
| Property value | Annual charge |
| More than £500,000 up to £1 million | £3,800 |
| More than £1 million up to £2 million | £7,700 |
| More than £2 million up to £5 million | £26,050 |
| More than £5 million up to £10 million | £60,900 |
| More than £10 million up to £20 million | £122,250 |
| More than £20 million | £244,750 |
What happens if I miss the filing deadline in April 2023?
You could be charged a penalty and interest if:
- you do not file your return on time – see more information here.
- you do not pay on time — find out more in CH155400 of the HMRC Compliance Handbook.
- you submit an inaccurate return – details here.
Don’t forget to file a return and pay for properties acquired in the year or new builds completed in-year. If left, the penalties charged could be over £1,600, even where relief from the ATED charge itself applies.
Do let us know if you would like some advice about your situation and Annual Tax on Enveloped Dwellings – we would be pleased to help.
