ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.
You’ll need to complete an ATED return if your property:
- is a dwelling
- is in the UK
- was valued at more than £500,000 (for returns from 2016 to 2017 onwards)
- is owned completely or partly by a:
- company
- partnership where any of the partners is a company
- collective investment scheme – for example a unit trust or an open-ended investment vehicle
Returns must be submitted on or after 1 April in any chargeable period.
Meaning of ‘dwelling’
Your property is 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.
Some properties are not classed as dwellings. These include:
- hotels
- guest houses
- boarding school accommodation
- hospitals
- student halls of residence
- military accommodation
- care homes
- prisons
What you need to pay
The amount you’ll need to pay is worked out using a banding system based on the value of your property.
There are different ways to work out the charge if:
- you own the dwelling for part of a year
- you claim a relief for part of the year
Submit your return and pay
You can use the ATED online service to submit your return and appoint an agent. You’ll then need to pay anything you owe.
Reliefs you can claim
There are several reliefs and exemptions that mean you might not have to pay any ATED on your property or may reduce the amount you have to pay.
You may be able to claim relief for your property if it is:
- let to a third party on a commercial basis and isn’t, at any time, occupied (or available for occupation) by anyone connected with the owner
- open to the public for at least 28 days a year
- being developed for resale by a property developer
- owned by a property trader as the stock of the business for the sole purpose of resale
- repossessed by a financial institution as a result of its business of lending money
- acquired under a regulated Home Reversion Plan
- being used by a trading business to provide living accommodation to certain qualifying employees
- a farmhouse occupied by a farm worker or a former long-serving farm worker
- owned by a registered provider of social housing
How to claim reliefs
If you have a claim to relief that reduces your ATED charge to nil, you can submit a Relief Declaration Return using the ATED online service.
Exemptions
There are a number of exemptions from ATED:
- charitable companies using the dwelling for charitable purposes
- public bodies
- bodies established for national purposes
If you meet the conditions for an exemption, you don’t need to file a return.
ATED-related CGT
If you sell your property you may also have to pay ATED-related CGT.
How much your company will pay depends on how long it has:
- owned the property
- been paying ATED on the property
You can find examples on how to calculate payment in the CGT manual.
The rest of the gain or loss may be chargeable to Corporation Tax or normal CGT.