From 1 April to 30 April each year, impacted property-owning businesses have just a month to make sure any ATED reporting is dealt with.
ATED is a tax that applies to companies (and certain other entities, including partnerships that include corporate partners) owning residential property valued at over £500,000. Individual landlords need not concern themselves with ATED.
If a company has an interest in a residential property (commercial properties and certain other properties, like hotels, are not within the scope of ATED) it would be well advised to consider whether an ATED Return or ATED Relief Declaration Return is required.
The ATED charge is based on the value of the property as at 1 April 2022, or later if purchased afterwards. There are separate rules that determine the valuation date where a dwelling is constructed.
The reporting for ATED is slightly peculiar, as the submission due at the end of April covers the year ahead (the filings due by 30 April 2024 cover the year ended 31 March 2025). Property owners must anticipate the use of the property over that time and file accordingly. An amendment can then be made if there is a change in use.
ATED is levied on a banded system. For ultra-high value properties (>£20m), the charge can be as much as £287,500. The lowest tier (for properties valued between £500,000 and £1m), the annual charge is £4,400.
Thankfully, there are lots of different reliefs that are available to effectively narrow the scope of ATED. For example, housing developers will be able to claim the “property developer” relief to ensure that they do not have to pay an ATED charge on all the various properties they may be holding for resale. It should be emphasised that these reliefs do not automatically apply. An ATED Relief Declaration Return must be filed to claim relief.
Although ATED is considered on a property-by-property basis, one relief form can cover multiple properties (in the above example of a property developer – they would only need to file one form to cover a potentially large bank of properties that it has developed).
There are some hidden wrinkles in many of the reliefs, so it is paramount to check with us or another advisor whether an ATED filing is required. If any residential properties are on the cusp of breaching the £500K threshold at the valuation date, it may even be worth filing a protective ATED Relief Declaration Return, should HMRC ever query the valuation.
We are currently in the process of contacting existing clients for whom we have previously made ATED submissions, but if you have not made ATED submissions in the past, or if you would just like some further information regarding ATED, please let your usual point of contact at Churchgates know.
Speed read
Make sure not to miss the ATED filing deadline of 30 April. Even if no ATED is payable, for properties over £500K relief has to be claimed by filling out a brief form. Only residential properties owned by companies are caught by ATED. Individual landlords do not need to worry.
