Companies must revalue their property every 5 years in line with ATED legislation. The 2023 to 2024 chargeable period is a revaluation year. Companies must use the valuation date of 1 April 2022 or the date of acquisition if later, to revalue their properties.
Overview
You need to know the value of your property to find out if it falls within the scope of Annual Tax on Enveloped Dwellings (ATED).
When you know the value of your property you can work out what property value band it falls into. This will tell you whether you need to pay ATED and how much you need to pay each year.
If you need help in working out how much ATED you need to pay, you can ask HM Revenue and Customs (HMRC) for a pre-return banding check (PRBC).
How to value your property
You can work out the value yourself or you can use a professional valuer. The valuation of the property must be in pounds sterling.
Valuations must be on an open-market willing buyer, willing seller basis and be a specific amount. If you do not own the unencumbered freehold interest the valuation may not necessarily be a vacant possession valuation.
The valuation date you need to use depends on when you owned the property.
The valuation dates are:
- an initial valuation date
- a revaluation date
The initial valuation date is:
- 1 April 2012 for properties owned on or before that date
- the date you acquired the property if it’s after 1 April 2012
There are fixed revaluation dates for all properties, every 5 years after 1 April 2012, which apply regardless of when the property was acquired.
| Revaluation date | Chargeable periods that apply (1 April to 31 March) |
|---|---|
| 1 April 2012 | 2013 to 2014 2014 to 2015 2015 to 2016 2016 to 2017 2017 to 2018 |
| 1 April 2017 | 2018 to 2019 2019 to 2020 2020 to 2021 2021 to 2022 2022 to 2023 |
| 1 April 2022 | 2023 to 2024 2024 to 2025 2025 to 2026 2026 to 2027 2027 to 2028 |
The value of the property for any chargeable period is therefore the later of:
- its initial valuation date
- the revaluation date
Part disposals
If you dispose of part of the property (for example, a small parcel of land, or by granting a lease) you must revalue your property.
The revaluation should be based on the property’s market value on the date of disposal. This valuation applies until a revaluation date of 1 April is reached.
New builds or reconstructed properties
If your property is newly constructed or you’ve altered it to become a new dwelling you should use the earlier of the date:
- it was first occupied
- it’s treated as coming into existence for Council Tax or (in Northern Ireland) domestic rating purposes
Changes in valuation
The valuation could change, for example if your property is developed or converted or falls outside of ATED completely and moves back in again.
HMRC can challenge your valuation. If we find that it’s wrong, we can charge penalties and interest.
Section 9 of the ATED: technical guidance gives more information about valuing your property.
How to value different types of properties and multiple interests
Mixed-use properties
If your property is mixed-use, for example residential and non-residential, you only need to value the residential part.
Properties with more than one dwelling
If your property consists of self-contained flats, each flat will be a dwelling and will be valued separately.
Linked dwellings
Your property may be valued as a single dwelling if:
- it has more than one dwelling, they’re each owned by a company or someone connected to the company and there’s internal access between them
- it consists of adjoining buildings with internal access — for example 2 terraced houses
Section 23 of the ATED: technical guidance explains more about single dwellings.
Multiple interests held in the same dwelling
There may be more than one interest held in a property, such as a freehold and a leasehold interest. These will be combined, with your property valued as a single dwelling interest if they’re held by:
- the same person
- connected persons
However where one of the connected persons is an individual the property is only valued as a single dwelling interest if:
- the property value is more than £2 million and the company’s interest is worth more than £500,000
- the property value is £2 million or less and the company’s interest is worth more than £250,000
Sections 15 and 16 of the ATED: technical guidance explain more about a single dwelling interest.
Pre-return banding check
If you’re not sure which value band your property falls into, you can ask HMRC for a PRBC if:
- you’re not due a relief that will reduce your ATED charge to nil
- your property valuation falls within 10% of a banding threshold
The 10% banding thresholds are:
- £450,000 to £550,000
- £900,000 to £1.1 million
- £1.8 million to £2.2 million
- £4.5 million to £5.5 million
- £9 million to £11 million
- £18 million to £22 million
How to apply for a PRBC and what happens next
You can apply using the PRBC form. You should do this in plenty of time to submit your return as you could be charged a penalty if your return is late.
You’ll get an acknowledgement and a reference number that you should include on your return or any letters you send about PRBC.
Normally within 30 working days of receiving your PRBC form HMRC will either:
- agree the banding you’ve chosen is the right one
- ask you for more information to help make a decision
- tell you they do not agree with your value banding and let you know what the right banding should be
- tell you they need to look at the inside of the building to complete their check
During busy times HMRC might take longer to reply.
HMRC will normally accept valuations prepared by a professional property valuer but might enquire into any later returns and challenge valuations in them.
If you do not get your PRBC in time to submit your return
If you think you might need to pay ATED, send your ATED return and payment of tax using the banding you think is right. HMRC may decide to open an enquiry into your return to consider the appropriate banding for your property.
If you get your PRBC after you’ve sent in your return and HMRC do not agree with your valuation, you’ll need to complete an amended return.
If you do not agree with HMRC’s PRBC
If your estimate of the property value means you’re due to pay tax, you should submit your return using your valuation. HMRC may decide to open an enquiry into your return and look at the appropriate banding for your property again.
If you think you do not need to pay ATED because your property is below the valuation threshold, HMRC may issue a ‘determination’. This is an estimate of what HMRC think you owe based on our valuation of your property and you’ll be asked for payment.
You can appeal against the determination if you do not agree with it but you cannot appeal against the PRBC.
If you need any help you can call the ATED helpline.
