Does your limited company own a UK residential property valued at more than £500,000?
Annual Tax on Enveloped Dwellings (ATED), is an annual return and tax that is due to be submitted and paid to HMRC if your limited company owns a UK residential property valued at more than £500,000.
Criteria for ATED return:
- Property is a dwelling (All or part can be used as a residence).
- Is in the UK.
- Valued at more than £500,000.
- Owned completely or partly by a company, partnership, or collective investment scheme.
Returns must be submitted on or within 30 days after 1st April 2023.
You must revalue your property every 5 years in line with ATED legislation, and so if you acquired a property on or before 1st April 2022 you will use the valuation at this date. If you acquired a property after the 1st April 2022, you would use the date you acquired the property as the valuation date.
For the period 1st April 2023 – 31st March 2024 the following charges apply:
| Property Value | Annual Charge |
| £500,000 – £1 million | £4,150 |
| £1million – £2 million | £8,450 |
| £2million – £5 million | £28,650 |
| £5million – £10 million | £67,050 |
| £10million – £20 million | £134,550 |
| £20 million plus | £269,450 |
Exemptions from the annual charge may apply if:
- You are a charitable company using the dwelling for charitable purposes.
- You are a public body listed in section 43 of the ATED technical guidance.
- You are a body established for national purposes listed in section 44 of the ATED technical guidance.
Reliefs may apply if:
- The dwelling is let out to a third part on a commercial basis, and is not at any time, occupied or available for occupation by anyone connected with the owner.
- The dwelling is open to the public for at least 28 days a year.
- Being redeveloped for resale by a property developer.
- Owner by a property trader, and sole purpose is resale.
- Repossessed by a financial institution as a result of its business of lending money.
- Acquired under a regulated home reversion plan.
- Being used by a trading business to provide living accommodation to certain qualifying employees.
- A farmhouse occupied by a farm worker or a former long-serving farm worker.
- Owned by a registered provider of social housing or a qualifying housing co-operative.
If your relief claim reduces your ATED charge to nil, you need to submit a Relief Declaration Return.
If you would like some assistance or advice on your Limited Company contact us today!
Please get in touch on 01273 441187 or book a discovery call with one of our expert accountants.
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