20th May 2022Reminder: Annual tax on enveloped dwellings – calculate the value of your property

Annual tax on enveloped dwellings (ATED) is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000. The taxable value will depend on the market value of your property on the latest valuation date. 

There are fixed revaluation dates for all properties, every 5 years after 1 April 2012, for example at 1 April 2017, 1 April 2022. 

Toby Ryland, corporate tax partner, explains:

 “For enveloped dwelling properties (not just homes) there is an annual tax. It’s a common mistake to assume the valuation dates are every 5 years from the purchase of a property – this is not the case. The dates are fixed, and the latest revaluation date was 1st April 2022 which means if you haven’t yet valued your property, you must do it now.”

In this article, Toby outlines what you need to know: 

Do I need to complete an ATED return?

Yes, if your property meets any of the following criteria: 

  • is a dwelling in the UK — your property is classed as 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.
  • 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
  • Remember, if your property is mixed-use which means both residential and non-residential, you only need to value the residential part
  • It’s also worth noting that if your property consists of self-contained flats, each flat will be a dwelling and will be valued separately.

How do you work out the value of your property? 

You can work out the value yourself or by using professional valuer. Don’t forget, if you dispose of part of the property (by granting a lease or selling some of the land) you must revalue your property.

How much will the ATED charge be? 

The taxable value will depend on the latest market value of your property (as of 1st April 2022). 

Here are the basic bands you will be required to pay (1st April 2022- 31st March 2023: 

Property value (£) Annual charge (£)
500,000 – 1 million 3,800
1 million – 2 million 7,700
More than 2 million up to 5 million 26,050
More than 5 million up to 10 million 60,900
More than 10 million up to 20 million 122,250
More than 20 million 244,750

 

For more information, or to discuss specific circumstances, please get in touch.

Key contacts

Toby Ryland HW Fisher

Toby Ryland
Partner

020 7874 7959
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