Now we are in April, another year’s ATED filings and payments to HMRC are on the horizon. If you want to avoid any penalties you will want to act fast as filings and payments of the ATED charges are due by the end of April.

What is ATED

ATED is a tax charged annually to certain entities who own a dwelling based in the UK which has a value greater than £500,000.

The chargeable period covers one year and starts from 1st April to 31st March of the following year, it is the same for everyone irrespective of when your financial year-ends.

Deadlines and Payments

ATED returns can be filed from 1st April to 30th April for the year ahead, and the charge will be due to HMRC by 30th April at the latest to avoid any penalties.

If an acquisition is made after 1st April, then an ATED return is required within 30 days of the acquisition.

Who is subject to ATED?

Entities which are subject to ATED include:

A company,
A partnership with a company member,
A collective investment scheme.

ATED is not applicable to individuals, it is mainly for companies who own residential properties.

What is a UK Dwelling?

A dwelling is any property where all or part of it can be used or could be used as a residence, the most common being a house or flat.

Any non-residential properties are not within the charge of ATED.

The Value of the Property

The value of the property is very important, firstly because it determines whether you are subject to ATED and secondly the amount of ATED you will be charged.

When to Revalue

ATED requires the property to be valued every 5 years and the date the revaluation takes place is the same for everyone. This is called the revaluation date, and the latest revaluation date was 1st April 2022. The next revaluation date being 1st April 2027.

The revaluation date for 1 April 2022 includes the chargeable periods,

2023-2024
2024-2025
2025-2026
2026-2027
2027-2028

For each of the chargeable periods you will be using the same valuation of the property made on 1st April 2022. Although you revalue the property on 1st April 2022 you do not use this value until the return for 2023 to 2024.

If you acquire properties after 1st April 2022, you will use the value at the acquisition date until you get to the next revaluation date, 1st April 2027, where you will revalue the property.

ATED Charge

The ATED charge as with all taxes is subject to change on a yearly basis, for the upcoming year from 1st April 2024 to 31st March 2025, the charges are

Property Value Annual Charge

Less than £500,000 £0

£500,000 – £1 million £4,400

More than £1 million to £2 million £9,000

More than £2 million to £5 million £30,550

More than £5 million to £10 million £71,500

More than £10 million to £20 million £143,550

More than £20 million £287,500

Reliefs and Exemptions

There are situations where you may not need to pay any ATED charge for your property or to reduce the amount of ATED charge you pay. In some cases, you may not need to submit an ATED return altogether.

Reliefs

You may claim relief from ATED charges if your property is.

Let to a third party on a commercial basis,
Being developed or owned for the sole purpose of resale,
Used by a trading business to provide living accommodation for certain qualifying employees,
Open to the public for at least 28 days a year,
A farmhouse occupied by farm workers,
Owned by a registered provider of social housing.

Exemptions

If you are one of the following you will not need to submit an ATED return,

Charitable company using the dwelling for charitable purposes,
Public bodies,
Bodies established for national purposes.

If you would like assistance with your tax return please do not hesitate to contact us at info@langricks.com.

Image: Freepik.com

For companies that own a residential dwelling, make sure you file your Annual Tax on Enveloped Dwellings tax return by the end of April