If your company owns such a property, then you could be subject to ATED.

Filing Deadline

ATED Returns (and tax if applicable) are always due at the beginning of the tax year to which they relate. As we are about to enter the 2023/24 tax year, any ATED Returns must be submitted and any tax liability paid by 30 April 2023. There are penalties for late submission and late payment which follow the same rules as for self-assessment

What if I purchase a property during the tax year?

As both the Return and tax charge is due at the beginning of the tax year, if you were to purchase a property after 1 April 2023 that falls under the scope of ATED, then you would need to declare this. HMRC stipulates a 30-day deadline from acquisition date for submission of the ATED Return and payment of any ATED charges due.

For new build properties, ATED returns and tax is due within 90 days of the earliest of first occupation or first becoming a dwelling for Council Tax purposes.

If this will affect you at any stage throughout the year, please get in touch if you would like our assistance with this.

Property within the Charge

A property will be a dwelling if all or part of it is used (or could be used) as a residence. For example, a house or flat - and this includes gardens, grounds and buildings within them.

Some properties are not classed as dwellings, including hotels, guest houses, boarding schools etc. and therefore no disclosure is required.

To fall within ATED for 2023-24, an individual property must have been valued at over £500,000 on 1 April 2022 or at acquisition if later.

If a property is chargeable and no reliefs are available, then a return needs to be made by 30 April 2023. The ATED charge will also be due and payable by this date.

The amount you'll need to pay is worked out using a banding system based on the value of your property:

Chargeable amounts for 1 April 2023 to 31 March 2024

Reliefs

Various reliefs can be claimed, including:

• let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner
• open to the public for at least 28 days a year
• being developed for resale by a property developer
• owned by a property trader as the stock of the business for the sole purpose of resale
• being used by a trading business to provide living accommodation to certain qualifying employees
• a farmhouse occupied by a farm worker or a former long-serving farm worker
• owned by a registered provider of social housing

If reliefs do apply and no tax is due, a return in the form of a Relief Declaration Return must still be submitted by 30 April 2023 and HMRC will charge penalties for late filing if the deadline is missed.

Case Studies

Here are some case studies of the more common scenarios to assist you in deciding whether ATED applies to your circumstances. Properties must be valued as of 1 April 2022 (or acquisition if later) for ATED purposes.

Case Study 1

Company owns three properties worth £400,000 each - ATED does not apply as no single property is worth over £500,000.

Case Study 2

Company owns a property worth £2 million - the property is rented to an unconnected party at a commercial rent rate so an ATED return is required, but the property will qualify for relief so no ATED charges will apply. However - if the situation changes in future years and relief is not due, then ATED charges may be payable on this property in future.

Case Study 3

Company owns 10 properties and buys and sells them as its main trading activity. Each property is worth £1 million - ATED return will be required for ALL properties as their values each exceed £500,000, but relief will mean that there will be no ATED charges due.