Annual Tax on Enveloped Dwellings (ATED)

Susie Walker

Susie Walker

Partner & Head of Tax

22 April 2016

ATED is an annual tax payable mainly by companies that own UK residential properties, but also applies to partnership where one of the partners is a company and collective investment schemes. 

An ATED return is required to be submitted to HMRC where the property is a dwelling in the UK. A property will be a dwelling if all or part of it is used, or could be used as a residence, for example a house or flat. It includes any gardens, grounds and buildings within them.

From 1 April 2016 the tax applies to properties valued above £500,000, with increasing rates and bands for higher valued properties. There are various reliefs and exemptions from the tax, which may mean you don’t have to pay. For example, excluded properties include:

  • hotels
  • guest houses
  • student halls of residence

Returns for the period 1 April 2016 to 31 March 2017 are due to be submitted by 30 April 2016. Failing this, HMRC will impose a penalty. While there are a number of reliefs available that may mean that no ATED charge will be payable, returns may still be required. 

Where you think you have a property that may be in scope to the charge, please consult your usual Johnston Carmichael contact.

Chargeable amounts for 1 April 2016 to 31 March 2017

Property ValueAnnual Charge
More than £500,000 but not more than £1 million£3,500
More than £1 million but not more than £2 million£7,000