Tax Compliance

Annual Tax on Enveloped Dwellings (ATED)

The Annual Tax on Enveloped Dwellings (ATED) is a yearly charge payable by certain corporate entities that own high-value residential property in the UK. This tax was introduced to discourage the ‘enveloping’ of high-value UK residential properties within corporate structures to gain other tax advantages.

ATED applies to UK residential properties (or ‘dwellings’) owned by a ‘Non-Natural Person’ (the corporate entity) that are valued at more than £500,000. A Non-Natural Person is typically defined as a company, a partnership with at least one corporate member, or a collective investment scheme.

At aventae, we provide the specialist compliance and planning expertise necessary to navigate this complex area of tax.

Do you need help with ATED?

If you’ve arrived on this page then you’re probably looking for advice on whether the ATED rules will apply to your situation and if so, how to meet your responsibilities. It is a complex area with strict compliance rules that can be overlooked and can also be misunderstood with a limited amount of HMRC guidance. Harsh penalties for non-compliance is the effect and so we understand your need for support and advice.

Compliance and deadlines

Unlike most taxes, ATED is payable and reported in advance for the chargeable period, which runs from 1 April to 31 March.

Existing properties: The ATED return and payment are generally due by 30 April for the period beginning 1 April of that same year. This is a tax that can catch you out.
New acquisitions of property: Returns are due within 30 days of acquiring a property that falls within the scope of ATED.
New builds: Returns are due within 90 days of the earliest the property is first occupied or becoming a dwelling for Council Tax purposes.

Valuations and rates

The tax is calculated based on a banded system linked to the property's market value at a certain date.

Valuation: Properties must be revalued every five years for the purposes of assessing ATED. The current chargeable period (e.g., 2023-24 to 2027-28) is based on the value as of 1 April 2022 (or the acquisition date if later)
Penalties: Penalties for late filing increase with time and can include daily penalties and a percentage of the unpaid tax, quickly accumulating to significant amounts.

How aventae supports your ATED compliance

We will assess and advise you on your potential liability to ATED charges.

It may be that your property is eligible for an ATED relief, but even in these situations, you may still need to file an ATED return, known as a Relief Declaration Return. Failure to claim the relief correctly can result in a tax charge.

Our comprehensive ATED service includes:

Initial assessment

We would determine whether your interest in a UK residential property is potentially liable to the ATED charge

Tax planning

While making the initial assessment, we would advise you of any tax planning opportunities, which also consider other taxes.

Relief strategy

We would identify any available reliefs, such as those for property rental businesses, property developers or properties used for qualifying employee accommodation. We would then assist you with making any claims for reliefs where available.

Registration and filing

Preparing and submitting both the full ATED Return or the Relief Declaration Return to HMRC on time, for compliance and penalty avoidance.

Ongoing support

We keep abreast of changes in the tax legislation to help keep you up to date with tax reporting and tax planning.

Non-compliance and disclosure

If you have unfortunately found that you have filed incorrectly or maybe not reported when you should have, we would support and advise you of the best strategy for disclosure with HMRC and help reduce any potential penalties.

Ready to secure your ATED compliance?

Given the complex reporting and filing deadlines, it’s understandable that you would wish to take advice on this area of tax compliance. If you believe you are affected by the Annual Tax on Enveloped Dwellings (ATED) charges, we’d be delighted to take your call.

I’m Ready