Annual Tax on Enveloped Dwellings ATED 2024
Published / Last Updated on 06/04/2024
Annual Tax on Enveloped Dwellings ATED: Tax Year 2024 (01/04/2024 to 31/03/2025).
Annual Residential Property Tax Explained
Officially known as an Annual Tax on Enveloped Dwellings (ATED), it is a yearly tax on high value property.
This annual residential property tax, technically a ‘mansion tax’ or wealth tax on high value properties in the UK owned not by people directly but owned by corporate entities.
What is a corporate entity?
A collective investment scheme (unit trust, investment trust, OEIC, bond etc), a limited company or a partnership (if one of the partners is a company).
Why has this tax started?
It has started because many wealthy UK and overseas property owners buy properties in this way. By setting up a corporate structure, they are able to sell on their property possibly without liability to taxes because it not the property that is sold, it is the shares that are transferred.
- Stamp Duty – the high rate of Stamp Duty 12% for properties over £1.5m is saved - although this has now been blocked with higher Stamp Duty payable by residential property purchases by 'non natural' persons - see Stamp Duty Rates
- Capital Gains Tax – if “business” is sold, rollover relief is available where no capital gains tax is payable if profits in a business are reinvested back into another “business”.
When did ATED start? 1 April 2013
How much is ATED? It is a yearly flat rate tax payable in property value bands:
|
Property Value at 1st April in Tax Year 2024 |
Tax Payable |
|
£500,000 to £1 million |
£4,400 |
|
£1 million to £2 million |
£9,000 |
|
£2 million to £5 million |
£30,550 |
|
£5 million to £10 million |
£71,500 |
|
£10 million to £20 million |
£143,550 |
|
£20 million and over |
£287,500 |
What if I own for part of the year? If you own for part of the year, you will pay a proportion of the ATED.
Exemptions
- Historic houses etc. where the property is owned by a corporate structure and is available for public access and viewing at least 28 days per year.
- Farmland residential property owned by a corporate structure where a worker lives in the property.
- Charitable property.
- Property bought for development.
How is a property valued?
- The property must be value at market selling price as at 1 April 2012 and then every 5 years i.e. 2017, 2022, 2027 etc.
- ATED payable is then based upon the scale above.
When is ATED payable?
- 1 April valuation, tax is payable within the month i.e. 30 April of the same year and so on.