Annual Tax on Enveloped Dwellings (ATED) returns – 2024/25

Annual Tax on Enveloped Dwellings (ATED) applies to any company (or partnership with a corporate member) holding an interest in residential properties (dwellings) with an individual property value exceeding £500,000 as at 1 April 2022 or at acquisition, if later.

If ATED applies, an ATED return will need to be submitted to HMRC for the 2024/25 tax year by the deadline on 30 April 2024. ATED is different to most taxes as ATED returns are submitted at the start of the tax year as opposed to after the tax year, with any ATED charges paid in advance and reliefs claimed in advance.

There are a few reliefs available from the charge, which must be claimed (if applicable), including the following:

  • Let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner
  • 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
  • Being used by a trading business to provide living accommodation to certain qualifying employees

If the company qualifies for one of the above reliefs, there is a requirement to complete an ATED Relief Declaration Return.

A separate ATED Relief Declaration Return is required for each applicable relief. For example, if a company holds a property for development, and also several properties available to let, then two separate relief returns will be required.

For any properties held not falling under any available reliefs, a full ATED return will be required to be completed, and any associated ATED tax charge will become payable.

The ATED charge for 2024/25 is as follows: Property valueAnnual charge
More than £500,000 but not more than £1 million£4,400
More than £1 million but not more than £2 million£9,000
More than £2 million but not more than £5 million£30,550
More than £5 million but not more than £10 million£71,500
More than £10 million but not more than £20 million£143,550
More than £20 million£287,500

For more information, please contact your local Perrys branch. Details can be found here.