ATED is an annual tax payable mainly by companies that own UK residential property valued at more than £500,000.
You’ll need to complete an ATED return if your property:
- is a dwelling
- is in the UK
- was valued at more than:
- £2 million (for returns from 2013 to 2014 onwards)
- £1 million (for returns from 2015 to 2016 onwards)
- £500,000 (for returns from 2016 to 2017 onwards)
- is owned completely or partly by a:
- company
- partnership where any of the partners is a company
- collective investment scheme – for example a unit trust or an open ended investment vehicle
Returns must be submitted on or after 1 April in any chargeable period.
Some properties are not classed as dwellings. These include:
- hotels
- guest houses
- boarding school accommodation
- hospitals
- student halls of residence
- military accommodation
- care homes
- prisons
It is possible that dwellings contained within the same building can be treated as a single dwelling, and the aggregate value applied. The details can be found in Section 117 FA 2013.
However, for a standard HMO property, where each of the dwellings is separately accessible, and none can be accessed privately via any of the other dwellings in the property, then none of the property values may need to be aggregated for the £500k threshold.
A building will fall within the ATED regime if it meets the definition of a single dwelling that has a value of over £500,000. If the tenants rooms constitute just a bedroom, and potentially an en-suite, it is unlikely each room will be a separate dwelling. Instead, all the rooms and shares facilities will make up one dwelling, over the £500,000 threshold. It would be different if each room was its own dwelling, that had its own facilities, with no need for shares areas anywhere in the property.
“112(1) A building or part of a building counts as a dwelling at any time when–
(a)it is used or suitable for use as a single dwelling, or
(b)it is in the process of being constructed or adapted for such use.”
