In the UK, ATED (Annual Tax on Enveloped Dwellings) is a tax that is payable by certain property owners. It applies to residential properties that are owned by a company, a partnership, or another type of corporate entity, rather than an individual.
If the property is valued at £500,000 or more and is owned by a company or corporate entity, then the property owner may be required to pay ATED tax. However, there are exemptions and reliefs available which means that not all property owners will have to pay the tax.
The amount of ATED tax payable depends on the value of the property and ranges from £3,700 to £232,350 per year. The tax is payable annually and the deadline for payment is usually 30th April each year.
It is important to note that if the property is used for commercial purposes, such as a hotel or a rental property, then ATED does not apply. Also, if the property is owned by an individual rather than a corporate entity, then ATED does not apply.
Buy-to-let investors may be eligible for exemptions and reliefs, including ATED relief, if their property rental business is held within a company and the property is let to a third party rather than being occupied by the owner or anyone connected to them. However, it's important to note that a separate return is required for each property and the exemption from ATED must be claimed.
It is advisable to consult with a tax professional or HM Revenue & Customs (HMRC) to determine whether ATED applies to your property and how much tax you may be liable to pay.
As of the 1 April 2023, these are the current rates:
