Autumn Statement 2016: Increase in Annual Tax on Enveloped Dwellings (ATED)

Currently an ATED charge is paid by companies that own UK residential property valued at more than £500,000. The current rates are as follows:

More than £500,000 but not more than £1 million – annual charge £3,500
More than £1 million but not more than £2 million – annual charge £7,000
More than £2 million but not more than £5 million – annual charge £23,350
More than £5 million but not more than £10 million – annual charge £54,450
More than £10 million but not more than £20 million – annual charge £109,050
More than £20 million – annual charge £218,200

From 1 April 2017, the annual charge for each band rate will increase in line with inflation. At present, there are no changes to minimum value of the property which remains at £500,000.

The current (23 November 2016) UK inflation rate 0.90%.

This will mean that all companies holding UK residential properties will see an increase in their ATED charge for the 2017 to 2018 chargeable period. It is also worth remembering that there will be a revaluation of all properties within the ATED charge on 1 April 2017, so some properties might move into a higher band.