High value residential property let by a company - does the ATED apply?.

Article | Daniel Simper | 31st March 2022

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Updated: 18 July 2023

The Annual Tax on Enveloped Dwellings (ATED) is a tax on high-value residential properties that are held within an ‘envelope’, such as a company or a partnership with at least one corporate partner. The charge does not apply to properties held by individuals.

The charge may apply where a company (or a partnership with at least one corporate partner or a collective investment scheme (such as a unit trust or an open-ended investment company)) owns all or part of a dwelling in the UK which was valued at more than £500,000 on 1 April 2012 (the last revaluation date) or acquired for more than this since that date.

The charge is payable annually in advance. Where a property is within the scope of the ATED on 1 April, an ATED return must be made online by 30 April and any tax payable for the period from 1 April to the following 31 March must be paid by the same date. The table below shows the rates of ATED which apply for the period from 1 April 2023 to 31 March 2024.

Value of property ATED (2023/24)
More than £500,000 up to £1 million£4,150
More than £1 million up to £2 million£8,450
More than £2 million up to £5 million£28,650
More than £5 million up to £10 million£67,050
More than £10 million up to £20 million£134,550
More than £20 million£269,450

Property Rental Business Relief

There are a number of reliefs available which may reduce the ATED charge to nil. One of these is the Property Rental Business Relief.

The ATED charge is reduced to nil if the relevant property is let on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner. Provided that this test is met, relief will be available.

The relief must be claimed through HMRC’s ATED online service. Even where the relief reduces the ATED charge to nil, a Relief Declaration Return needs to be completed.

HMRC will charge late filing penalties where ATED returns are not filed on time.

If you have any further questions please contact a PEM adviser.

About the author

Daniel Simper

Daniel is a Manager in our Business Tax team. He joined PEM in 2015 and is planning on completing his Read more …