The Annual Tax on Enveloped Dwellings (ATED) came into effect from 1 April 2013. The tax applies to certain Non-Natural Persons (NNPs) that own interests in dwellings valued at more than £500,000. These provisions affect most companies, partnerships with company members and collective investment schemes. There is no ATED or ATED-related Capital Gains Tax payable if an individual owns a property directly, rather than through a company.
The main ATED reliefs are broadly where the property is:
- Held as trading stock of a property development or trading business
- open to the public for at least 28 days a year as part of a trade carried on commercially with a view to profit;
- repossessed by a mortgage lender;
- a farmhouse, subject to meeting various conditions;
- held by a charity for its charitable purposes, subject to meeting various conditions;
- held by a registered social housing provider for qualifying purposes.
Dwellings are revalued for ATED purposes every 5 years. the definition of the ‘dwelling’ includes the garden or grounds that go with the dwelling. There are also special rules where an NNP holds an interest in more than one dwelling such as a block of flats.
For the period 1 April 2019 to 31 March 2020, ATED is chargeable on property valued at:
- More than £5000,000 but not more than £1m – £3,650
- More than £1m but not more than £2m – £7,400
- More than £2m but not more than £5m – £24,800
- More than £5m but not more than £10m – £57,900
- More than £10m but not more than £20m – £116,100
- More than £20m – £232,350
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