It’s Annual Tax on Enveloped Dwellings (ATED) return season, so if you either own or have a share in residential property, you may be preparing to file your return or relief claims for the year 2018/2019. The deadline for filing and any payment is 30 April 2018.
ATED applies to companies, partnerships and collective investment schemes that own UK residential property, either completely or in part. The threshold was reduced to £500,000 from 1 April 2016. So if you own a property worth £500k you may have to file a return. Some properties are excluded – such as charities, public premises or bodies established for national purposes.
For those properties that are not excluded, some companies will be able to claim relief from the ATED charge. For example, if your property is let to a third party on a commercial basis and isn’t occupied by anyone connected to the owner then you may be able to file a relief claim.
Similarly, if a property is being developed for resale by a property developer, is open to the public, is being used in a property trading business or is owned by a registered provider of social housing then you possibly meet the criteria for ATED relief.
In all cases, you will need to check to see if you qualify for exemption or tax relief. If you are eligible for a relief claim, you will still need to file an ATED return in order to make the claim.
The charge generally increases year on year based on inflation and the table below demonstrates this increase in value:
|ATED chargeable 2017/18||ATED chargeable 2018/19|
|£500,000 – £1 million||£3,500||£3,600|
|£1 million – £2 million||£7,050||£7,250|
|£2 million – £5 million||£23,550||£24,250|
|£5 million – £10 million||£54,950||£56,550|
|£10 million – £20 million||£110,100||£113,400|
|More than £20 million||£220,350||£226,950|
ATED bands for property valuations are set every 5 years. Property values were last set on 1 April 2012 (or date of acquisition if later).
For the period 1 April 2018 to 31 March 2019, the value of property used will be based on the value at 1 April 2017 rather than 1 April 2012. As a result, many people will now fall into the charge where they hadn’t before, or may have moved bands and will be required to pay more tax. Remember, you could be charged a penalty if you don’t file your ATED return or relief claim on time, and/or if your return contains inaccuracies.
You should also note that when a new ATED property is purchased the deadline for filing a return is generally within 30 days of purchase.