Companies taxed under the Annual Tax on Enveloped Dwellings (ATED) scheme are reminded that revaluations are required for 2023/24 returns.
ATED annual charge
ATED is an annual tax, payable mainly by companies (both UK-resident and non-UK resident) owning residential property in the UK. To be within scope of the charge, the property value needs to exceed £500,000.
Your resulting liability will depend on what ‘band’ your property falls into, as far as its valuation is concerned. Bands for the 2022/23 and 2023/24 chargeable periods are as follows:
In some instances, reliefs and exemptions from the tax may mean you do not have anything to pay, further details about which can be found here.
ATED returns due by 30 April
The deadline for filing ATED returns is normally 30 April during the tax year. Companies within scope of ATED must file 2023/24 returns by 30 April 2023 or risk penalties.
You must submit a return if your property is a dwelling in the UK and it 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)
Where property is wholly or partly owned by a company, a partnership where any of the partners is a company, or a collective investment scheme, a return will also be required.
ATED revaluations for 2023/24
In line with legislation, properties should be revalued every five years and the 2023/24 chargeable period is a revaluation year.
Companies within scope of the scheme will need to obtain an open market valuation of their existing residential properties, as of 1 April 2022. You will need to utilise the value at acquisition, if the date of acquisition is later than 1 April 2022.
ATED penalties issued by HMRC
Should you fail to submit your return on time, HMRC can charge penalties at £10 per day, for up to 90 days, where a return is more than three months late, and issue fines of up to £1,600 where a return is six months late.
HMRC may also charge penalties and interest where payments of ATED are incorrect or delayed.
Supporting you to meet your ATED obligations
Our property and tax specialists can advise corporate and individual property owners on establishing the most appropriate ownership structures, can support you to maximise your tax efficiency and, if you are within scope of ATED, can help you fulfil your statutory reporting and payment obligations.
To talk to us about ATED, or other property-related tax matters, contact our team today.
