Following on from last month’s ATED update the available reliefs are considered alongside filing deadlines.

The reliefs available are:

Property rental business relief

Property is used in a commercial property business to generate taxable profit, or steps are being taken to use it in a commercial property business without delay.

For example:

  • It is advertised with a view to finding a tenant
  • It is or has been managed
  • Landlord enforces his legal rights against the tenant, for example recovers from the tenant costs incurred as a result of damage caused by the tenant
  • Periods during which the property is empty are short
  • Landlord advertises the property in its local area where finding a suitable tenant is commercially possible
  • Rent asked is not excessive in comparison to local rates
  • Property is being prepared for rental (redecoration works are carried out, alteration works are done, property is being furnished)

ATED relief may still be claimed despite a delay in renting the property, if the delay is unavoidable and caused by commercial factors, such as:

  • Property is damaged and needs to undergo remedial works
  • Delays in obtaining licences or meeting other legal regulations
  • Adverse market conditions and the property owner can prove the decision to delay rental was based on expert opinion on the rental market (his own due to experience or reputable third party).

Look back and look forward provisions deny relief if a period of non-qualifying occupation arises (see below).

Preparation for sale or demolition relief

Property is not currently rented but some of the following conditions are met:

  • Property has been put up for sale
  • Property is to be demolished and replaced with a new one which will qualify for ATED relief
  • Property is to be  converted and the converted property will qualify for ATED relief


In the above example reliefs will initially apply during the whole period of ownership, first under property trade and then preparation for sale. As ATED relief declaration was made for 2020/21 claiming the relief, but the property was later sold, an amended return to reflect the sale needs to be submitted. This can be done immediately when the property is sold on 28/02/2021 but the window for return submission lasts till 31/03/2022 – the last day of the next chargeable period.

Dwelling opened to the public relief

The relief applies where the following exists:

  • The property typically is a conference centre, offers  training facilities, or is a place of historical interest
  • Public access constitutes a commercial activity or various types of commercial activity, to generate income, which is not incidental
    • for example a dwelling could be made available to host weddings and host a conference. As long as the total number of days spent on both activities is 28 days or more, relief will be due.
    • if access to property is granted free of charge, the relief is not available due to the commercial basis condition not being met.
  • Availability of building
    • at least 28 days in a chargeable period (although not necessarily used for 28 days) or
    • being prepared to be available
    • or there is a demonstrable intention for it to be made available in subsequent periods for at least 28 days, despite it not being available in the current period
  • Proportion of building to be made available
    • whole of the building or
    • significant part – eg a small part of gardens of a stately home will not qualify


Relief will not be withdrawn if a non-qualifying individual occupies the building. For example – the owner lives at the property while making part of it available to the public, to generate income towards the upkeep of the property.

Property development relief

This applies to companies buying, and developing or redeveloping, property for resale, including land. The following are some of the conditions when looking to see if the relief is available:

  • major works take place rather than cosmetic redecoration prior to sale
  • development is on commercial basis and with a view to a profit
  • property can be rented out prior to sale if the intention is to sell the property as part of property development trade
  • if the main aim is to rent the property, property rental business relief should be claimed in future years
  • relief applies to a new never occupied property received by the developer as consideration from an individual who passes ownership of it back to the developer, in return for a different dwelling (reverse acquisition in a qualifying exchange)

look back and look forward provisions are triggered by non-qualifying occupation (see below)

Property trade relief

The relief applies where the:

  • property is held as stock for resale
  • business is run with a view to a profit rather than an investment activity

Look back and look forward provisions may also apply if non-qualifying occupation occurs.

Occupation by certain employees or partners relief

The relief applies where:

  • the property is used to provide living accommodation to qualifying employees (including directors and company secretaries) or partners
  • the dwelling is made available for reasons that are solely or mainly to meet the purposes of the trade carried out by the company or partnership owning the property
  • employees or partners hold less than 10% in the company or partnership. This includes shares held on behalf of the employee or partner by someone else, including an individual, another company or an associate, which are taken into account just like a stake held directly by those employees/partners

Periods of non-qualifying occupation

Occupation of a property subject to ATED by a non-qualifying individual for a number of reliefs triggers the withdrawal of the ATED reliefs. A non-qualifying person is:

  • an individual who owns a joint interest in a property with a company caught by ATED
  • an individual (and those connected with him/her – relatives) connected with a company which has interest in an ATED property (usually 10% shareholding or more)
  • partner of a partnership which has an interest in the ATED-caught property, his/her spouse, relatives and their spouses
    • people connected with a partner of a partnership are spouse, brother, sister, ancestor or lineal descendant (children or grandchildren) and their spouses
    • a partner of a partnership is not connected with another partner in that partnership, relatives of that other partner, and the other partner’s relatives’ spouses
  • In a trust scenario:
    • settlor of a trust which sets up a company which acquires an ATED-caught property – settlor is connected with the company because they are connected with the trust (relevant settlor)
    • settlor’s spouse or civil partner in a similar scenario
    • settlor’s spouse’s or civil partner’s relatives in a similar scenario
  • a 50% holder (‘major participant’), or someone connected with them, of an interest in a collective investment scheme which holds in a single dwelling

Whatever the basis for a relief (for example rental, or preparation for sale etc) non-qualifying occupation brings that relief into charge and affects the period of occupation as well as preceding and subsequent periods.

 Look forward and look back provisions denying ATED relief

If there is a non-qualifying occupation (occupation of the property) during the time when it is marketed to be rented or prepared for sale, ATED relief is denied. The withdrawal of the relief affects:

  • any period immediately preceding the non-qualifying occupation in the chargeable period when the occupation arose
  • the preceding period (chargeable period before the one when non-qualifying occupation arose). The relief is only withdrawn until the day before it was occupied by a tenant in that preceding period.
  • three chargeable periods after the chargeable period in which the non-qualifying occupation arose. The relief is only withdrawn until the day before it was occupied again by a tenant again.

For example:



The property would normally qualify for ATED relief under property rental business (it was being marketed with a view to finding a tenant and to be rented out without delay), despite not being actually rented out. Therefore initially ATED relief declaration for period 2016/17 would have been filed (by 30 April 2016).

However, on 1 June 2016 non-qualifying occupation of the property denied the ATED relief as follows:

  • for period 01/04/2016 to 31/03/2016 – part of the chargeable period in which non-qualifying occupation arose
  • for 2015-16 –due to ‘12 month look back’ rule, relief is denied for the whole of the proceeding period
  • for periods 2, 3 and 4 (2017/18, 2018/19, 2019/20) due to the three-year look forward rule, which denies relief in the following three chargeable periods.

The above applies even if the non-qualifying occupant is charged market rent. This means that:

  • amended relief needs to be submitted and ATED paid for 2015-16
  • amended return needs to be submitted and ATED paid for 2016-17
  • normal returns and ATED payment is due for 2017/18, 2018/19, 2019/20

However, if a qualifying tenant is found and property rented subsequently, or a qualifying occupation by a tenant arose in the past, the look back and look forward rules are ‘stopped’ a day before the qualifying occupation started (for subsequent periods), and a day before it ended for the preceding period).

Let’s consider the following example:


Despite the non-qualifying occupation triggering the ‘look back’ and ‘look forward’ rule which would normally deny ATED relief for 2015/16 and 2017/18 to 2019/20, relief is only denied for a short period.

‘Look back’ into the preceding chargeable period (2015/16) shows that the property had been rented. Relief is therefore only denied till 1 April 2016, no look back applies beyond that date.

Relief is denied from 1 December 2016 to 30 September 2018 (straddling two chargeable periods), as the property was not rented, only marketed with a view to rent.

However, from 1 October 2018 relief is due, as the property is rented out. Any further ‘look forward’ provisions are stopped at 30 September 2018 and relief is not denied for the subsequent period.

Non-qualifying occupation from 01/06/16 to 30/11/16 and the period when the property was vacant 01/12/16 to the end of the chargeable period 31/03/2016 are not entitled to relief.

Amended return will need to be submitted for 2016/17 and ATED paid in proportion to the length of time when the property was subject to non-qualifying occupation and then empty – 01/06/2016 to 31/03/2017 (end of chargeable period).

A normal return for 2017/18 with ATED payable needs to be submitted. This period will later be subject to an amended return to exclude the period of qualifying occupation and obtain ATED partial refund for period 01/10/17 to 31/03/2018.

If property is first rented, then marketing to sell the property starts, and the property is sold, an amended return needs to be submitted by 31 March the year following, to reflect the sale.

Let’s look at an example with a period of non-qualifying occupation and a subsequent sale.



  • For 2021/22 – Amended return under look back provisions (preceding chargeable period) denying previously claimed relief but only till 02/02/2022, because the look back is stopped at that point due to a qualifying occupation by a tenant who was there till 01/02/2022. Period chargeable is from 02/02/2022 to 31/03/22 and approportioned ATED charge will apply.
  • For 2022/23 – Normal ATED relief declaration as property was used in a rental business and then advertised to find a new tenant
  • For 2022/23 – Amended return to show the now disqualified from relief period of 12 months made of:
    • under ‘look back’ from 01/04/22 to 30/04/22 (period directly preceding non- qualified occupation in the same chargeable period)
    • actual period of non-qualified occupation 01/05/22 to 01/12/22
    • further period from 02/12/22 to 31/03/2023 due to ‘look forward’ provisions of the subsequent (to the period in which non-qualifying occupation took place) chargeable period – property was not rented so the look forward rule does not stop
  • For 2023/24 – Normal ATED return with no relief as the second chargeable period following the period of non-qualifying occupation is chargeable to ATED by 30/04/2023
  • Amended 2023/24 return due to the subsequent sale to be submitted from 15/09/2023 (date of sale) to 31/03/24, in order to reclaim the originally paid ATED in the first 2023/24 return.

Article from ACCA In Practice