Landlord companies with residential properties in the UK worth more than £500,000 have been reminded that they have one month left to revalue their properties and inform HM Revenue and Customs (HMRC) of any changes. This follows the UK government’s Annual Tax on Enveloped Dwellings (ATED) rules, which require companies to revalue their UK residential properties every five years, and 2023 to 2024 is one of those years.

The revaluation can be done by the owner or by a professional valuer, and it must be based on the value of the property on 1 April 2022 or the date of acquisition if this was after 1 April 2022. This valuation sets the rate of annual payment until the next revaluation year.

Companies are required to submit their ATED return to HMRC and make any payments for the 2023 to 2024 period between 1 and 30 April 2023, or they could face a penalty.

Morris Graham, HMRC’s Head of Stamp Taxes Policy, has urged companies to act quickly to complete the revaluations of their residential property portfolios, no matter how large or small, and to pay what they owe. He has also encouraged companies that are new to the Annual Tax on Enveloped Dwellings to familiarise themselves with the guidance on GOV.UK.

Once a property has been revalued, the annual charge is applicable for the next five years. The charge is dependent on the property’s value, and it starts at £4,150 for properties valued between £500,000 and £1 million. This increases to £28,650 a year for properties valued between £2 million and £5 million, and £269,450 for properties worth more than £20 million. A full list of rates can be found on GOV.UK.

Companies that own residential properties in the UK, which were previously worth less than £500,000, should ensure they undertake a revaluation and notify HMRC by completing an ATED return if any of their properties now exceed the threshold. Failure to comply with the ATED rules could result in penalties for landlords.