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Tax guide to Enveloped Dwellings returns and revaluations

The Annual Tax on Enveloped Dwellings (ATED) was introduced in April 2012. It is charged where certain residential properties are owned within a corporate structure. This tax not only catches UK properties owned by wealthy oligarchs via offshore companies but also applies to UK resident companies. Originally the charge only applied where the value of the property exceeded £2 million but that threshold has been subsequently reduced to £500,000.

enveloped dwellings

The charge for 2022/23 starts at £3,800 and rises to £244,750 where the property value is more than £20 million.

Properties need to be revalued every five years and the latest valuation date is 1 April 2022. With significant increases in property values in recent years this may mean that more companies may be required to complete an ATED return.

There are numerous exemptions and reliefs from ATED but companies still need to submit an ATED Relief Declaration Return.

Main ATED reliefs

The main situations where there is a relief from ATED are where the property is:-

  • let to a third party on a commercial basis
  • developed for resale by a property developer
  • owned by a property trader as the stock of the business for the sole purpose of resale
  • a farmhouse occupied by a farm worker or a former long-serving farm worker

Count on Cardens to assist you with Enveloped Dwellings and more

We can advise you on issues such as…

  • Tax reduction strategies for rental income
  • What is a repair and tax deductible and what is capital and not
  • When to use a Limited Company to save tax
  • Trading income versus Capital Gain considerations and advice
  • Capital Gains rollover and holdover considerations
  • Stamp duty planning
  • Tax efficient mortgage structures
  • VAT considerations of property deals
  • Making the most of the Principal Private Residence election
  • Tax issues on the sale of part of your residence
  • Second homes
  • Inheritance Tax angles

If you would like to discuss any issues raised above, please speak with your usual Cardens team. If you’re finding us for the first time, get in touch at or book a free consultation

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