ATED (Annual Tax on Enveloped Dwellings)

What is ATED?

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 (or we will complete one for you) if your property:

    • Is in the UK
    • Is a dwelling (it is a dwelling if all or part of it is used or could be used as a residence
    • 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

To find out types of property that are not classed as dwellings, click here.

2023/24 is a revaluation year – what does this mean?

For 2023/24, for ATED filing and payment purposes, a revaluation of the property at 1 April 2022 is now required. This valuation will set the ATED charge you will pay for the next five years.

What are the ATED charges?

The 2023/24 ATED rates are:

Property Value Annual Charge
£500,001 – £1m £4,150
£1m – £2m £8,450
£2m – £5m £28,650
£5m – £10m £67,050
£10m – £20m £134,550
Over £20m £269,450

Are there reliefs and exemptions from this tax?

Yes. For example, if you let to a third party and the property is not, at any time, occupied by anyone connected to the owner. For other exemptions, see here

How can McPhersons help?

McPhersons have a dedicated tax department and can complete your ATED return for you. These need to be completed even if you are exempt as you are claiming a relief otherwise a charge may be made and you may be barred from claiming the relief. Penalties for failing to deliver a return, late returns and not paying on time are also enforced. With many properties increasing in value, it may be worth considering ‘de-enveloping’ the property from the existing structure. We can assist with this and  the potential taxes arising as a result – Capital Gains Tax and Stamp Duty Land Tax.

Contact us to find out more

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