Annual tax on enveloped dwellings – compliance activity

The annual tax on enveloped dwellings (ATED) has been around since 2013 but it is often incorrectly reported or worse not reported at all. So it will come as little surprise that it is now an area that HMRC is focusing more of its attention on due to its improved access to data following recent initiatives such as the register of overseas entities (ROE) which came into force on 1 August 2022.

This article sets out the background and various considerations relating to ATED highlights HMRC’s recent activity and explains how to address ATED issues effectively.

Overview of ATED

ATED is an annual charge on UK residential property held by a ‘non-natural person’ ie a company. The charge applies to dwellings with a value of £500 000 or more unless a relief is claimed. It does not apply to individuals. The...