Do I need to file an ATED Return?

Whether ATED return is required for a client or not

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Annual Tax on Enveloped Dwellings in not an area I'm very familiar with, but I'm a bit puzzled by a new client I've recently onboarded.

The previous accountant has been completing ATED returns for this business each year, there are two properties in the company.  Neither has a value of >£500,000 but together they're valued at about £760,000.  My understanding was that the ATED threshold is per property and so no ATED return is required - am I correct or I have a misunderstood the rules here?

Appreciate this is probably quite a straightforward answer but I want to double check because my own reading contradicts what the previous adviser was doing and this would be the first ATED return I've had to look at.

Replies (7)

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By FactChecker
19th Apr 2024 22:41

Interesting (as I've never had to do one of these either), but the only legislation I can find is "The Annual Tax on Enveloped Dwellings (Returns) Regulations 2013" ... and that merely "provides the Commissioners for HMRC (“the Commissioners”) with the authority to prescribe the form and content of an ATED return" - i.e. it has nothing to say on the matter of thresholds.

The 'Technical Guidance' (all 90+ pages of it) can be downloaded from ... so happy reading!

"The Annual Tax on Enveloped Dwellings (ATED) is a tax charged on ‘non-natural persons’ (a company, a partnership with a company member, or a collective investment scheme) which hold an interest in one or more UK residential dwelling(s) known as (a ‘single-dwelling interest’) and where the value of that single dwelling interest is above the relevant threshold.
When ATED was introduced on 1 April 2013, the threshold amount was £2 million. The threshold has since been reduced, firstly to £1 million from 1 April 2015 and then to £500,000 from 1 April 2016."

Thanks (3)
Replying to FactChecker:
By Tax Dragon
20th Apr 2024 11:14

It takes just one section (108 FA 2013) to define that term 'single-dwelling interest'; it takes 8 more sections (112 to 119) to explain 'dwelling'.


OP: 'property'.

I'm a fan of the phrase 'less is more'. But is it always?

Thanks (1)
Replying to Tax Dragon:
By Jdopus
22nd Apr 2024 09:24

In simple terms then, I have been advised by my client there are two simple residential homes in the company which appear to meet the definition of dwellings.

Thanks (0)
By taxdigital
20th Apr 2024 11:24

An ATED return (s.159 FA 2013) is required if 'tax is charged on a person for a chargeable period with respect to a single-dwelling interest' which has a taxable value of more than £500,000 (s.94). Since none of the two independent dwelling interests has a taxable value of more than £500k no ATED applies.

You might want to write to HMRC to let them know before 30 April that no return will be filed.

Thanks (1)
By Tax Dragon
20th Apr 2024 12:04

Before becoming distracted by what they thought they did not agree on, Basil and Richard agreed that a submission made when the conditions in s159 were not met was not an ATED return. When Basil and Richard agree, I think there's a high chance that the statement they agree on is correct.

See here:

Thanks (2)
Replying to Tax Dragon:
By Justin Bryant
21st Apr 2024 11:00

Wasn't that me who first said that there, with supporting case law (I can't be bothered to check as it's mostly people trading insults (as usual), but see my comment 24th Dec 2020 12:24 and I'm the ATED king here don't forget)?

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Replying to Justin Bryant:
By Ruddles
21st Apr 2024 17:32

Justin Bryant wrote:

Wasn't that me who first said that there,

No, it wasn’t.

You’re welcome.

Thanks (0)