HMRC have asked us to share the following briefing note in relation to the above.

“Annual Tax on Enveloped Dwellings (ATED)

What is ATED?

• Whilst most individuals own UK residential property directly, some properties are owned by a company or other corporate entity. This form of ownership is described as “enveloping”.
• ATED is an annual tax charged on a company, partnership (where one of the members is a company) or other collective investment vehicles that own UK residential property valued above a certain amount. https://www.gov.uk/annual-tax-on-enveloped-dwellings-the-basics.
• The amount of ATED due is worked out using a banding system based on the value of the property.
• The ATED chargeable period runs from 1 April to 31 March. And an ATED return must be filed by 30 April in the year of charge.
• There are a number of reliefs which may reduce the charge to nil. All reliefs must be claimed in an annual return.

ATED Legislative Changes

• At Budget 2014 the government announced that the initial entry valuation threshold at which properties come within the scope of ATED would be lowered from £2m to £500,000. This reduction is being phased in over 2 chargeable periods.
• From 1 April 2015 an additional band applies to enveloped properties worth more than £1m but less than £2m. The annual charge for this new band is £7,000
• From 1 April 2016 ATED will apply to enveloped properties worth more than £500,000 but less than £1m. The annual charge for this band in 2016/17 will be £3,500.
• At Budget 2014 the Government announced measures to simplify the filing obligations for businesses holding properties eligible to a relief, and which have no ATED liability. From 1 April 2015 onwards, such businesses are only required to deliver one relief declaration return at the start of the year for all properties covered by that relief, instead of multiple detailed returns; i.e.one for each such property.

ATED Digital Developments

• HMRC is developing a new ATED digital service.
• Live testing of Phase 1 of the new ATED digital service is ongoing. The public version of Phase 1 is scheduled for release in early 2016. It will enable:
  • the chargeable person or their agent to register for the new ATED digital service
  • the chargeable person to appoint an agent online to act on their behalf for ATED;
• HMRC will launch Phase 1 in advance of the 30 April 2016 filing deadline, to give customers and their agents’ time to register, and for agents to be appointed.
• Phase 2 of the digital service is scheduled for release on 1 April 2016. It will enable the chargeable person or their agent to:
  • File an online return declaring a liability for chargeable periods 2016/17 onwards;
  • File an online ATED relief declaration return for 2016/17 onwards
  • Obtain a payment reference number
  • Make an online amendment to an ATED return already filed using the new digital service.

Agent volunteers invited

Live testing of Phase 1 of our new ATED digital service is currently ongoing and we would like to invite agents to participate. If you or any of your members are interested in taking part, with HMRC support available, please send the following information to mailbox address ated.digitalteam@hmrc.gsi.gov.uk using email subject title ATED Private Beta Volunteer.

Contact Name

Contact telephone number

Contact email address

Agents and clients who take part in the private beta testing will be set up and ready to use the new system when it becomes available on 1 April 2016.

Next Steps

We will update and publish our ATED pages on Gov.UK to coincide with the 2016 public launch of Phase 1 and Phase 2 of our new ATED digital service.

We will also provide updates through our bi-monthly Agent Update publications.”

END OF UPDATE