🎧 Listen to This Article
International investors and corporates owning UK residential properties via corporate structures must ensure compliance with the Annual Tax on Enveloped Dwellings (ATED) regime, particularly with regard to the mandatory 5-year revaluation requirement.
Under the ATED framework, properties held within a corporate “envelope”—such as companies, partnerships with corporate partners, or certain collective investment schemes—must be revalued every five years, with the current cycle covering chargeable periods from 2023 to 2024 through to 2027 to 2028.
Key Dates and Valuation Rules
To determine ATED liability, property values must be reassessed in line with statutory guidelines:
- If a property was acquired on or before 1 April 2022, the valuation date is 1 April 2022.
- If a property was acquired after 1 April 2022, the acquisition date becomes the valuation date.
This valuation anchors the ATED charge bands, which determine the annual tax payable, with higher rates applying to properties exceeding £500,000 in value.
What Qualifies as ‘Enveloped’?
A property is considered ‘enveloped’ when it is held through a corporate wrapper, rather than in personal ownership. While many residential properties in the UK are owned directly by individuals, the ATED regime targets those acquired through structures such as:
- UK and overseas companies
- Collective investment vehicles
- Certain partnerships involving corporate members
Why Revaluation Matters
Failing to update property valuations can result in misreporting, underpayment or overpayment of ATED charges, and potential penalties or interest. This is particularly important given the volatility in UK real estate prices in recent years, especially in high-value postcodes such as London’s prime central zones.
Professional Advice Recommended
Tax professionals advising high-net-worth individuals, property holding companies, and international investment structures should:
- Review existing valuations dated prior to April 2022
- Confirm compliance for new acquisitions post-2022
- Prepare for ATED returns in April of each chargeable year based on current bands
- Monitor for future changes to ATED thresholds or relief provisions
For further details, clarification, contributions, or any concerns regarding this article, please get in touch with us at editorial@tax.news. We value your feedback and are committed to providing accurate and timely information. Please note that our privacy policy will handle all inquiries.
