ATED has been with us for 10 cycles now and, having just completed another campaign – reporting for 2022/23 was required by 30 April 2022 – rather than rest on our laurels, I thought it would be a good idea to prepare in advance for next year’s campaign.
When ATED was introduced, the first valuation date was 1 April 2012 and 5-yearly revaluations are built in to the system, so another revaluation is needed as of 1 April 2022, which will form the basis of the 2023/24 returns. Since the last revaluation in 2017, average house prices have increased by around 20%, so whereas, a property that had a value of, say, £425,000 was well below the reporting threshold, that property could easily breach the reporting threshold for next year’s returns.
In some ways it’s easier for properties that are already within the reporting regime, as at least the owners of those properties know about ATED and have been used to making the necessary returns. A number of previously unaffected property owners could get pulled into the regime from next year. Knowing about this in advance will help plan necessary actions, which is essential given the short reporting window of one month. I would advise corporate owners of UK residential properties to obtain valuations of their properties as at April 2022 sooner rather than later, so that the properties on which returns will be necessary in April next year are known about.
It’s probably useful to give to a brief outline of how ATED works for any uninitiated readers. As noted above, ATED returns are required for properties with a value in excess of £500,000 and the amounts chargeable for 2022/23 were as follows:
|
Property value |
Tax payable |
|
£500,001 to £1,000,000 |
£3,800 |
|
£1,000,001 to £2,000,000 |
£7,700 |
|
£2,000,001 to £5,000,000 |
£26,050 |
|
£5,000,001 to £10,000,000 |
£60,900 |
|
£10,000,001 to £20,000,000 |
£122,250 |
|
£20,000,000+ |
£244,750 |
NB tax payable is index-linked so increases each year.
Returns and payments of tax need to be made by 30 April. Late filing and late payment penalties and interest apply. There are reliefs from the tax for certain property-related activities, which include:
- property rental businesses
- dwellings open to the public
- property developers (including exchange of dwellings)
- financial institutions acquiring dwellings in the course of lending
- occupation by certain employees or partners;
- farmhouses and
- providers of social housing.
However, returns are still required to claim the relevant relief.
If you have a company that owns a dwelling in the UK, now is the time to obtain a valuation of that property and find out whether or not the company falls within the ATED regime. If you do, consider what will need to be done next April, which reliefs may apply and whether or not you are going to carry out the filing yourself.
The next step
If you need any advice in this area, please contact Alison Price or your usual UHY contact.
