74: Budget 2017: ATED rates increased
As part of the 2017 Budget the ATED charges for the 2018/19 chargeable period (ie from 1 April 2018 to 31 March 2019) were announced. These have increased in line with the September 2017 CPI (Consumer Prices Index), which was 3%. Those who still hold UK residential property in a corporate ‘envelope’ will therefore see a comparatively modest increase in their ATED bill next year, provided the property concerned remains in its existing band of charge from 1 April 2018.
Properties must be revalued every five years for ATED purposes, and as noted in a separate blog post, the second statutory valuation date was 1 April 2017. This means that the value of a property on that date will fix the ATED band into which a property falls and therefore the level of ATED charge for the next five tax years from 1 April 2018. This valuation date will apply to properties owned as at 1 April 2012 and any purchased in an enveloped structure since then. If you are not familiar with the valuation rules we would strongly urge you to read our separate blog on the subject.
The ATED bands and levels of charge for the year 2018/19 are shown below.
|Taxable value of the interest on the relevant date||Annual chargeable amount|
|Greater than £500,000 but not greater than £1m||£3,500||£3,600||+£100|
|Greater than £1m but not greater than £2m||£7,050||£7,250||+£200|
|Greater than £2m but not greater than £5m||£23,550||£24,250||+£700|
|Greater than £5m but not greater than £10m||£54,950||£56,550||+£1,600|
|Greater than £10m but not greater than £20m||£110,100||£113,400||+£3,300|
|Greater than £20m||£220,350||£226,950||+£6,600|
With the latest changes to the inheritance tax treatment of enveloped properties taking effect from 6 April 2017 many owners may now want to de-envelope particularly if the property is likely to jump into the next ATED band from 1 April 2018.