The Annual Tax on Enveloped Dwellings (ATED) is an annual charge on UK residential property valued at more than £500,000 that is owned wholly or partly by a company, a partnership with a corporate member, or a collective investment scheme. Many property-owning companies are entitled to relief, but the relief has to be claimed by filing a return each year.
When ATED applies
The charge applies to each dwelling separately and is set in bands according to the property’s value. Values are fixed by reference to set valuation dates, currently 1 April 2022, and are then used for five years. A property also comes into the regime when it is acquired, built or converted, or when its value at a revaluation date takes it over the threshold.
Returns and deadlines
The ATED year runs from 1 April to 31 March. Returns and any tax are due by 30 April (see our tax calendar) at the start of the period, not after it ends. Separate deadlines apply to newly acquired properties and new builds. Late returns attract penalties even where no tax is payable because a relief applies, so missing a relief declaration return can be costly.
Reliefs
Reliefs are available where the property is, for example:
- let commercially to unconnected tenants as part of a property rental business
- held by a property developer for development and resale
- held by a property trader as trading stock
- open to the public, or used as a farmhouse or by certain employees
Relief can be lost if a connected person occupies the property, even briefly, so we review how each property is used.
Related taxes
ATED sits alongside other rules on enveloped property, including the 17% SDLT rate that can apply when a company buys a dwelling costing more than £500,000 without a relief, and inheritance tax rules for UK residential property held through overseas structures. We look at all of these together.
How we help
- Confirming whether ATED applies and to which properties
- Annual ATED returns and relief declaration returns
- Arranging professional valuations where a property is near a band boundary
- Reviewing whether the property should remain in a company
- Correcting missed returns with HMRC
Related services and insights
- SPV and Hybrid Company Structures
- Non-Resident Landlords & Investors
- Property Tax Planning & Consultancy
- Tax Calendar
Get your returns in on time
Book an appointment to review your ATED position before the next 30 April deadline.
