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Residential property in companies - tax revaluations needed
13th January 2023
Companies holding residential property that falls within the Annual Tax on Enveloped Dwellings (ATED) charge must ensure such property is revalued every 5 years.
The 2023/24 chargeable period is a revaluation year and the valuation date is 1 April 2022 or the date of acquisition if later, and any tax is paid on that valuation by 30 April 2023.
There is also an annual ATED return that has to be completed.
Exempted from the tax are properties such as: hotels, guest houses, boarding school accommodation, hospitals, student halls of residence, military accommodation, care homes and prisons.
ATED has to be declared and paid by 30 April 2023 for the year 1 April 2023 to 31 March 2024.
The charge was first introduced from 1 April 2013 to tackle the avoidance of stamp duty land tax (SDLT). The charge relates to residential property owned by a non-natural person, meaning generally a company or a partnership with a corporate member.
When the charge initially took effect it only applied to properties with a value in excess of £2m, but the threshold has since reduced to £500,000, catching many more properties in the net.
There are fixed revaluation dates for all properties, every 5 years after 1 April 2012, for example at 1 April 2017, 1 April 2022 and so on, regardless of when the property was acquired.
The value of the property for any chargeable period is therefore the later of:
- its initial valuation date
- the revaluation date
The 2023/24 charge is based on the value of the property at 1 April 2022, or the value at the date it is acquired if later, giving companies time to get their valuations done.
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 |
Guidance
- Submit your Annual Tax on Enveloped Dwellings return
- Annual Tax on Enveloped Dwellings: work out the value of your property
- Annual Tax on Enveloped Dwellings: technical guidance
Contact us
If you would like to discuss whether your company may be liable to ATED, or how your residential property business may be affected, please contact a member of our Property Tax team.
