Amendments to the UK annual residential property tax (ATED)

News

This amendment may affect those who own a UK residential property through a company.

There have been some developments on the UK annual tax on UK residential properties (formally known as ‘Annual Tax on Enveloped Dwellings’ – ATED).

Up until recently, ATED applied only on UK residential properties with a value of more than £2million owned by non-natural persons (i.e. owned by companies, partnerships or collective investment schemes).

Recent amendments lower the value of a residential property subject to ATED down to:

- £1million as from 1 April 2015, and
-  £500,000 as from 1 April 2016

The property value is determined by taking the value as at 1 April 2012 or at cost if acquired at a later date.

The amount of ATED is worked out using a banding system based on the value of the property. Value / Annual tax charge is as follows:

-  More than £500,000 but not more than £1 million: £3,500 (from 2016/17)
-  More than £1 million but not more than £2 million: £7,000 (from 2015/16)
-  More than £2 million but not more than £5 million: £15,400
-  More than £5 million but not more than £10 million: £35,900
-  More than £10 million but not more than £20 million: £71,850
-  More than £20 million: £143,750

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