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!

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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Charles Lyell

Never call an accountant a credit to his profession; a good accountant is a debit to his profession.

Charles Lyell