Annual Tax on Enveloped Dwellings (ATED) Chargeable Period – 1 April 2023 to 31 March 2024
The annual ATED return 30 day filing window for the year ahead opens on 1 April 2023. These annual returns – including Relief Declaration Returns - must be filed by 30 April 2023.
The annual ATED tax charge for the year ahead is also payable by 30 April 2023.
ATED is an annual tax on ‘high value’ UK residential property owned by both UK and foreign companies, partnerships with a corporate partner and collective investment schemes.
A property is currently high value for ATED if it was valued at £500,000 or more on either 1 April 2022 or the date of acquisition / completion if later.
High value UK residential property within ATED can include rental properties, valuable freehold interests and trading stock.
The amount of the annual tax charge depends on the value of the property on 1 April 2022 or on the date of acquisition if later.
Relief can be claimed from the annual tax charge, for example by property traders, developers or rental businesses if certain conditions are met. This claim must be made through the submission of an ATED Relief Declaration Return.
There are some exemptions from ATED for particular bodies (e.g. charitable companies, public / national bodies) if certain conditions are met. There are also some particular types of living accommodation that are specifically excluded from ATED (e.g. hotels, student accommodation).
There are deadlines for reporting certain changes in circumstances (e.g. acquisitions and / or disposals) after the ATED return for the year ahead is filed. The earliest of these deadlines is within 30 days of the change.
Automatic penalties and interest charges will arise on late filing and late payment.
New valuation date
Properties have to be revalued for ATED every five years and the chargeable period 1 April 2023 to 31 March 2024 is the first year to which the new revaluation date of 1 April 2022 applies. This valuation will determine, for the five years from 1 April 2023, which properties are high value and also the amount of the ATED charge payable.
It is important to consider whether any further UK residential property valued at £500,000 or more on either 1 April 2022 or the date of acquisition if later, will now come within the ATED provisions.
BGM can help you identify whether an ATED return is required and also where a relief may be claimed by a company, partnership (with a corporate member) and collective investment scheme, which owns high value UK residential property.
If you would like to discuss any ATED issues please contact your usual BGM advisor.