Annual Tax on Enveloped Dwellings Returns (ATED)

by | Mar 11, 2021

Annual Tax on Enveloped Dwellings Return

Annual Tax on Enveloped Dwellings (ATED) returns in respect of the year ending 31 March 2022 (2021/2022) are due to be filed by 30 April 2021.

A company is required to file an ATED return if it held, on 1 April 2021, an interest in a residential property that was worth more than £500,000 on 1 April 2017 or, if later, the date of acquisition. 

What information will you need on your property? 

You will need to be clear about:

What UK residential property will be in your ownership at 1 April 2021;

    • The address of the property;
    • Its value/value range at the relevant time (1 April 2017 or acquisition if later)
    • The reason why the property is held: is it let to unconnected parties, currently being developed, held for resale or used by a person connected with the company. 

Whether any properties held on 1 April 2019 have changed use since that date; 

Whether any new residential properties have been acquired since 1 April 2020 and;

    • The address of the property;
    • The date of acquisition;
    • The value of the property on acquisition;
    • How the property will be used (e.g. developed for resale or let to a third party); 

Whether any of the properties held by the company are (or are expected to be) occupied by anyone connected with you (broadly family member) or your company (shareholder, Director, Secretary or employee) 

How is an ATED return completed and filed?

Your ATED return must be filed online.  If your accountant or tax adviser is to do this on your behalf they will need to hold Agent permissions with HMRC, this will allow them to prepare and file the return on your behalf.

ATED returns will not be available for population online until 1 April 2021 but as the returns must be filed by 30 April 2021 in order to avoid late filing penalties, the timescale for preparation of the returns is actually very tight. 

ATED charge payable 

If the company holds any such interests it may be liable to pay the ATED charge subject to it qualifying for one of a number of reliefs (see below).

The ATED charge rates depend on the value of the property at on 1 April 2017 or, if later, the date of acquisition.  If any ATED charge is due it must be paid by 30 April 2021. 

The ATED rates in force for 2021/22 have not yet been published.  The rates for last year were: 

Property value

Annual charge

More than £500,000 up to £1 million

£3,700

More than £1 million up to £2 million

£7,500

More than £2 million up to £5 million

£25,200

More than £5 million up to £10 million

£58,850

More than £10 million up to £20 million

£118,050

More than £20 million

£236,250

Relief from the charge

There are a number of exclusions from the ATED charge on properties valued in excess of £500,000 and one or more of these may apply to the properties you own.  These include:

  • Properties let on a commercial basis (excluding those let to individuals connected with the company);
  • Properties held as part of a property development business; and
  • Properties held as part of a property dealing business. 

There are other reliefs that apply in specific circumstances and we would be happy to provide further information on request. 

If a property is expected to fall into one of the categories of relief for the entire year then no ATED charge will be due in relation to that return. 

Late filing penalties and enquiries 

The return must be filed by 30 April 2021.  If the return is not filed by this date a penalty of £100 will be charged.  A further penalty of £10 per day if the return is more than 3 months late (up to £900).  Further penalties will be charged for returns filed more than 6 months late. 

HMRC have the opportunity to enquire into an ATED return once it has been filed.  If the return is filed by the statutory filing date, HMRC will have until 30 April 2022 to open an enquiry.  If the return is filed after the statutory filing date, the enquiry may be opened any time within the year following the actual filing date. 

If you wish to speak to a member of our tax team regarding ATED returns please contact us on 020 7330 0000

 

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