What is Annual Tax on Enveloped Dwellings?

Annual Tax on Enveloped Dwellings – made simple!

Since 2013, an annual tax on enveloped dwellings (ATED) has been chargeable on residential property, with a value of more than £5000,000 that is owned by:

  • a company
  • partnership (having one or more companies as a member) or
  • collective investment scheme

The tax rate is set in bands according to the value of property value (please see Notes below).

Reliefs Available

There are various reliefs available for instance:

  • if let commercially to an unconnected third party,
  • if held for charitable purposes
  • If held as part of a property development business

There is also a proportionate reduction in certain circumstances, for example, ownership for only part of a year, change of use, etc.

There are linked Capital Gains Tax measures, for further details see here.

Notes:
The ATED rates are increased each year in line with the Consumer Prices Index (CPI). Since 1 April 2016 the annual tax on enveloped dwellings (ATED) applies to property valued over £500,000 (£2m from 1 April 2013, £1m from 1 April 2015). The rate of charge is shown in the table below.

We have created several posts surrounding Tax Rates for further reading here.

Property values
ATED charge 1 April 2016
ATED charge 1 April 2017
ATED charge 1 April 2018
£500,001-£999,999
£3,500
£3,500
£3,600
£1m-£1,999,999
£7,000
£7,050
£7,250
£2m-£4,999,999
£23,350
£23,550
£24,250
£5m – £9,999,999
£54,450
£54,950
£56,550
£10m-£19,999,999
£109,050
£110,100
£113,400
£20m+
£218,200
£220,350
£226,950
All properties which are subject to ATED will need to be revalued again at 1 April 2017, and this valuation will then apply for to ATED returns for the five year periods starting 1 April 2018.

For more information, we provide a Business Consultation to ensure our clients benefits from tax planning and accounting matters.

For any assistance contact Companies999, we will be happy to help you!

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