While changes affecting private residential landlords have made headlines in recent years, the ATED regime is a significant cost for companies, LLPs and partnerships that own a UK residential property valued at more than £500,000.
The ATED regime requires you to file a return and pay tax due on or after 1 April in any chargeable period. Failure to file a return or pay this tax on time will result in significant penalties.
HM Revenue & Customs (HMRC) lists the following annual charges for properties within the ATED regime:
|Property value||Annual charge|
|More than £500,000 but not more than £1 million||£3,500|
|More than £1 million but not more than £2 million||£7,050|
|More than £2 million but not more than £5 million||£23,550|
|More than £5 million but not more than £10 million||£54,950|
|More than £10 million but not more than £20 million||£110,100|
|More than £20 million||£220,350|
Since 1 April 2018 ATED has been based on the value of the property at 1 April 2017.
This means that you may, this year, be subject to ATED if you have not been until now. It also means that you may move up a band.
It is permitted to provide your own valuation or you can use a professional valuation for the purposes of ATED.
If carrying out your own valuation, however, it is important to consider that there are substantial penalties which apply in cases where tax has been underpaid as a result of undervaluing a property.