If your company owns UK residential property, time is running out for you to revalue and tell HMRC if any are worth more than £500,000. Under the Annual Tax on Enveloped Dwellings (ATED) rules, businesses must revalue their UK residential property every five years – and 2023 to 2024 is one of those years.

Deadline looms for completing your ATED return and making payments

Your company must submit its Annual Tax on Enveloped Dwellings return to HMRC and make any payments for the 2023-2024 period between 1 and 30 April 2023 or you could face a penalty.

As the owner, you can carry out the revaluation yourself or ask a professional valuer to do it for you.

The revaluation must be based on the value of your property on 1 April 2022 – or the date you became the owner if this was after 1 April 2022. This valuation sets your rate of annual payment until the next revaluation year.

What if your property was previously worth less than £0.5 million?

You should still carry out a revaluation, even if your property was previously worth less than £500,000. It may now exceed the threshold, and if so, you’ll need to tell HMRC in an ATED return.

Once a property has been revalued, the annual charge is applicable for the next five years. The charge is dependent on your property’s value and starts at £4,150 for properties valued between £500,000 and £1 million.

Chargeable amounts for 1 April 2023 to 31 March 2024:

Property value Annual charge
More than £500,000 up to £1 million £4,150
More than £1 million up to £2 million £8,450
More than £2 million up to £5 million £28,650
More than £5 million up to £10 million £67,050
More than £10 million up to £20 million £134,550
More than £20 million £269,450

Reliefs and exemptions from the ATED charge

Reliefs and exemptions are available, which may mean you don’t need to pay any ATED on your property or that you can reduce the amount.

You may be able to claim relief if your property 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 or a qualifying housing co-operative

You must claim for relief through a full ATED return or a simplified form, known as a Relief Declaration Return.

To find out more about the reliefs and the conditions – and whether you could be exempt from the tax – take a look at the ATED technical guidance.

Help with Annual Tax on Enveloped Dwellings rules

Get in touch with our team for guidance on ATED matters, property taxation and tax returns.

Call us on 07813 434195 or email: stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation