ATED Tax Returns & Compliance

What is ATED?

The Annual Tax on Enveloped Dwellings (ATED) is a UK tax that applies to companies, partnerships with corporate members, and collective investment schemes that own UK residential property valued above certain thresholds. Introduced in 2013, ATED is designed to discourage the use of corporate structures to hold high-value residential property and to ensure fair taxation of such properties.

ATED applies to "enveloped dwellings" - UK residential properties owned by companies or other non-natural persons. The tax is charged annually based on the property's value, with different charge bands applying depending on the property value. However, many reliefs are available that can exempt properties from ATED charges entirely.

ATED Charge Bands and Rates

ATED charges are based on property values, with different charge bands applying:

• Over £500,000 to £1 million: £4,150 per year (2024/25)
• Over £1 million to £2 million: £8,450 per year (2024/25)
• Over £2 million to £5 million: £28,650 per year (2024/25)
• Over £5 million to £10 million: £67,050 per year (2024/25)
• Over £10 million to £20 million: £134,550 per year (2024/25)
• Over £20 million: £269,100 per year (2024/25)

Properties valued at £500,000 or less are not subject to ATED. Charges are typically payable annually by 30 April for the following chargeable period.

ATED Reliefs

Many reliefs are available that can exempt properties from ATED charges. Our ATED service includes comprehensive relief assessment to ensure you claim all available exemptions:

Property Rental Business Relief

Properties let to third parties on a commercial basis may qualify for property rental business relief, exempting them from ATED charges. To qualify:

• The property must be let to a person who is not connected to the company
• The letting must be on commercial terms and at arm's length
• The property must be available for letting for at least 140 days in the chargeable period
• The property must actually be let for at least 70 days in the chargeable period

Property Development Relief

Properties being developed or held for development may qualify for property development relief:

• The property must be acquired or held with the intention of developing and reselling it
• Development activities must be carried out with a view to profit
• The property must not be occupied by a connected person

Property Trading Relief

Properties held as trading stock by property traders may qualify for property trading relief:

• The company must be a property trader
• The property must be held as trading stock
• The property must not be occupied by a connected person

Dwellings Open to the Public Relief

Properties that are open to the public for at least 28 days per year may qualify for this relief, including:

• Historic houses open to the public
• Properties used for charitable purposes
• Properties used for public access

Farmhouse Relief

Farmhouses that are part of a working farm may qualify for farmhouse relief, provided:

• The farmhouse is occupied by a farm worker or former long-serving farm worker
• The farmhouse is part of a property used for farming purposes

Employee Accommodation Relief

Properties used to provide accommodation to employees may qualify for employee accommodation relief:

• The property must be provided for the purposes of the company's trade
• The employee must be required to live in the property as a condition of employment
• The property must not be occupied by a connected person

Our ATED Services

ATED Compliance and Return Preparation

We provide comprehensive ATED compliance services, including:

• Assessment of ATED liability for all corporate-held residential properties
• Preparation and submission of ATED returns by the 30 April deadline
• Property valuation reviews to ensure accurate charge band assessments
• Ongoing monitoring of ATED obligations as property values and circumstances change

ATED Relief Assessment

We conduct thorough reviews to identify all available ATED reliefs:

• Comprehensive assessment of property use to identify qualifying reliefs
• Review of letting arrangements for property rental business relief
• Assessment of development activities for property development relief
• Evaluation of trading activities for property trading relief
• Review of other relief conditions and eligibility

ATED Charge Calculations

We ensure accurate ATED charge calculations:

• Property valuation reviews to determine correct charge bands
• Calculation of ATED charges where reliefs do not apply
• Proportional charge calculations for part-year ownership or relief periods
• Planning for ATED charge payments and cash flow management

Strategic ATED Planning

We provide strategic advice to minimise ATED charges:

• Structuring property ownership to qualify for reliefs
• Planning property use to meet relief conditions
• Timing of property transactions to optimise ATED positions
• Integration with other property taxes, including SDLT and CGT

ATED Return Deadlines and Penalties

ATED returns must be submitted by 30 April each year for the following chargeable period (1 April to 31 March). Late returns incur automatic penalties:

• Up to 3 months late: £100 penalty
• Over 3 months late: £200 penalty
• Over 6 months late: £200 penalty plus 10% of the ATED charge
• Over 12 months late: £200 penalty plus 20% of the ATED charge

Late payment of ATED charges also incurs interest and potential penalties. We ensure all returns are submitted on time and all charges are paid by the deadline.

Property Valuations for ATED

ATED charges are based on property values at specific valuation dates. Properties must be valued at:

• 1 April 2017 (for properties owned on that date)
• The date of acquisition (for properties acquired after 1 April 2017)
• Every 5 years thereafter (revaluation dates)

We can help coordinate professional property valuations to ensure accurate ATED charge band assessments and support relief claims where applicable.

ATED and Other Property Taxes

ATED interacts with other property taxes, and we provide integrated advice:

ATED and SDLT

Companies purchasing residential property may be subject to both ATED and higher SDLT rates (15% for properties over £500,000). We provide integrated planning to consider both taxes.

ATED and CGT

Disposals of ATED properties may be subject to CGT. We coordinate ATED and CGT planning to optimise overall tax positions.

ATED and Corporation Tax

ATED charges are generally deductible for corporation tax purposes. We ensure ATED charges are properly accounted for in corporation tax computations.

Why Choose Acumon for ATED Services

Next Steps

If your company owns UK residential property valued over £500,000, you may have ATED obligations. Contact our ATED specialists to assess your liability, identify available reliefs, and ensure full compliance with ATED requirements.