Annual Tax on Enveloped Dwellings (“ATED”): Review now to avoid £1,600 penalties

ATED is an annual tax charge and reporting requirement which can apply to any corporate entity which owns, or partly owns residential property with a market value over £500,000.

The deadline for filing an ATED return and paying any tax due is 30 April 2019. Failure to make even a “nil” return for ATED, including if you are a property development or property letting company, can mean that your company could be hit with late filing penalties of up to £1,600. It is therefore important that you review your position as soon as possible.

You may be required to file an ATED return if, on 1 April 2019:

  • You are a company, partnership with a corporate member or a collective investment scheme, and
  • You own a residential property or dwelling with a market value of over £500,000. It does not matter if you hold the residential property as trading stock or a capital asset.

There are a number of exemptions and reliefs available. Our flow chart, which can be found in great er detail here will help you to decide whether you may need to make an ATED return and if any exemptions or reliefs apply.

Please note that even if no tax is due you may still be required to file a ‘Nil’ return and failure to do so can result in penalties being imposed.

Next steps

If you need to submit a return and wish to do this yourself, you can register with HMRC’s on-line service. You will need to have a Government Gateway account set up in order to access the online ATED service. If you do not have an account you can create one when you register.

If you would prefer us to complete the ATED return and submit it for you, our fees for returns are £275 plus VAT for existing clients and £375 for new clients. Additional fees may apply if more than one return is required.

You can call us on 01904 464100 or email at for further information and support.