Previously called Annual Residential Property Tax, the Annual Tax on Enveloped Dwellings (ATED) is a tax payable by companies that own a high-value residential property (a 'dwelling'). The first ATED return is due to be submitted by 1 October 2013 and any tax due must be paid by 31 October 2013.
A property is said to be ‘enveloped’ when the ownership sits within a corporate structure - eg a company, collective investment vehicle or partnerships with a corporate member.
An ATED tax return for a property is due if all of the following apply:
company;
a partnership where one of the partners is a company; or
a 'collective investment vehicle': for example, a unit trust or an open-ended investment company.
Property Value | Annual charge |
---|---|
£2m to £5m | £15,000 |
£5 to £10m | £35,000 |
£10m to £20m | £70,000 |
Over £20m | £140,000 |
A number of reliefs are available that can reduce the tax charge to zero. Where a property is valued at an amount close to one of the band thresholds HMRC can be contacted to agree which ATED band the property falls into, or whether it falls outside the tax as it is deemed to be under the £2m threshold. This facility is called a pre-return banding check and is available to owners who are not due another relief that will reduce the ATED charge to nil and where the value of the property falls within 10 per cent of a banding threshold, starting from £1.8m-£2.2m and applying to each band up to £20m with the final check applying to properties in the £18m-£22m bracket.
Once HMRC receives the form, it will send an acknowledgement and a reference number within 30 working days. HMRC will either agree/disagree that the band chosen is appropriate or ask for further information in order to help them make a decision about whether the chosen band is correct.
In some cases, the inside of the building might need to be inspected as part of the check. HMRC will normally be able to accept valuations prepared by a professional property valuer but it reserves the right to enquire into any subsequent ATED returns or challenge valuations included in those returns where they consider there is a risk that the return or valuation is wrong.
A dwelling might get relief from ATED if it is:
These reliefs could reduce the tax completely but it has to be claimed when the return is submitted.