Annual Tax on Enveloped Dwellings (ATED) is a taxation of certain high-value residential properties owned by companies, partnerships, or collective investment schemes. It is very crucial to file the tax in the correct manner and timely to avoid penalty and get into compliance. We are providing below the most critical deadlines and provisions to file a Property Ownership Tax.
What is ATED and Who Must File?
ATED applies to UK residential property worth over £500,000 and owned by non-individuals such as companies, corporate partners in partnerships, or collective investment schemes. ATED is computed annually based on the property value and is paid even when the property is not generating rental income.
Key ATED Deadlines
It is necessary for the property-owning entities to be aware of the payment and filing deadlines so as not to incur penalties:
· 1st April – Start of the ATED chargeable period.
· 1st April to 30th April – Tax must be filed for the chargeable period.
· 30th April – Payment of the ATED charge.
· During the course of the year – If a property becomes subject to ATED, a return must be filed within 30 days of the change.
Late payment can result in penalties of between £100 and more for prolonged delays.
ATED Tax Bands and Charges
The level of tax paid depends upon the property valuation band. For the tax year 2024-2025, ATED charges range from £4,400 for properties in the £500,000 – £1 million valuation band and higher than £287,500 for properties over £20 million.
A revaluation of a property is needed every five years, with the next due revaluation being April 2027.
Exemptions and Reliefs
Certain properties qualify for ATED reliefs or exemptions, which reduce or eliminate tax charges. Some common reliefs include:
· Property rental companies (where the property is rented to a third party on a commercial basis).
· Developers and traders holding properties as stock.
· Charitable institutions using properties for charitable purposes.
Even when a property is qualifying for relief, an ATED return must be filed in order to avail the exemption.
How UK Property Accountants Can Help
ATED return filing and comprehension can be complex, especially when dealing with exemptions or multiple properties. UK Property Accountants specialize in property taxation, with accurate ATED filing and client tax position optimization.
For assistance with filing or tax obligations explanation, contact UK Property Accountants today for professional advice.
