Revaluations for ATED from 1 April 2017

When the Annual Tax on Enveloped Dwellings (“ATED”) was introduced in April 2013, owners of ATED properties had to obtain a valuation of the property as at 1 April 2012, with revaluations taking place every five years.

This means that ATED properties now need to be revalued as at 1 April 2017.

Although the revaluation will not be required until filing of the 2018 return (period 1 April 2018 to 31 March 2019) it may be beneficial to obtain a valuation now rather than relying on a retrospective valuation; valuations by chartered surveyors are less likely to be disputed by HMRC.

Previously, where a property value at 1 April 2012 was below the ATED threshold, it may now be liable for ATED for the first time based on its 1 April 2017 revaluation; such cases can easily be missed and if the property does not qualify for an exemption there will be an ATED charge. Early valuations are advisable to provide advance warning of possible ATED charges and the opportunity for restructuring ownership or use of the property if appropriate.

If a property does fall within the ATED regime, please be mindful that a return needs to be filed by 30 April within the relevant tax year and that tax is paid for the year ahead. For example, if a company is within the ATED regime from 1 April 2017 a return needs to be filed by 30 April 2017 for the year ended 31 March 2018. The ATED charge is payable on 30 April 2017.

If you qualify for relief from the charge, a relief declaration return also needs to be filed by 30 April 2017, even though there is no tax due; penalties are charged in cases where a relief declaration return is filed late.