Annual Tax on Enveloped Dwellings (ATED)

22 Mar 2021

By Dave Whitfield CTA ATT MAAT | Associate Tax Consultant


Dave Whitfield, Associate Tax Consultant

The ATED regime applies to entities which hold UK residential property that are each valued over £500,000.  The entities are:

  • Companies

  • Partnerships with at least one company member

  • Collective investment schemes (including unit trusts)

For example, a limited company that owns a house worth over £500,000 would be subject to ATED, but a block of flats worth over £500,000 where none of the individual flats exceed £500,000 would not.

If you are already setup with WR Partners’ online system, ATED returns will continue to be submitted through this online service. If new to the regime, consider the additional time this process will take, and contact us well before the submission deadline of the 30 April 2021.

What needs to be prepared?

There are two types of ATED return,

  •  Chargeable return

  • Relief declaration return

A chargeable return is required where there are no reliefs available and a payment is required.

What reliefs are available?

If an entity does own residential property in excess of £500K, but the property is,

  •  Let to a third party on a commercial basis and isn’t, at any time, occupied or available to be occupied by anyone connected with the owner

  • Part of a trading property business

  • Occupied by employees of the business

  • A farmhouse which is occupied by a qualifying farm worker who farms the associated land, or a former long-serving farm worker (or their surviving spouse/civil partner)

  • Owned by a provider of social housing

  • Open to the public for at least 28 days a year

Then there will not be an ATED charge, however, a Relief Declaration Return will still need to be prepared and submitted.

Deadlines and penalties

  • If an entity owns UK residential property valued at £500K as at 1 April 2021, a return will be required covering the year to 31 March 2022

  • For 2018/19 and the following four years, the taxable value is the property’s value at 1 April 2017, or if acquired after 1 April 2017, its acquisition cost.

  • This return is due to HMRC by 30 April 2021

  • Where a property is acquired during a chargeable period a return is due to HMRC within 30 days of acquisition

  • Penalties are the same as Self-Assessment so there is an automatic £100 penalty if a return is filed after 30 April 2021, with potential exposure to daily penalties of £10 per day for 90 days if the return is 3 months late

  • Interest will be charged on late payment of the ATED charge

We are happy to prepare and submit ATED returns and can process work on multiple properties and for clients with many complexities involved.

Here to help

If you have any queries in relation to ATED please contact our tax consultancy team,

ATED Chargeable amounts for 1 April 2021 to 31 March 2022:

ATED table.JPG

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