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.

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
£5m – £9,999,999
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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