ATED applies to UK residential properties owned by companies, partnerships with corporate members, or collective investment schemes. Properties below £500,000 are outside the ATED scope.

Frequently Asked Questions

What is ATED and who pays it?

Annual Tax on Enveloped Dwellings (ATED) is a UK tax charged on residential properties worth more than £500,000 that are owned by companies, partnerships with corporate members, or collective investment schemes. It was introduced in 2013 to discourage corporate 'enveloping' of residential properties to avoid SDLT on subsequent sales. ATED does not apply to individuals or trustees.

What are the ATED rates for 2026/27?

The 2026/27 ATED annual charges are: £500,001–£1m = £4,400; £1m–£2m = £9,000; £2m–£5m = £30,550; £5m–£10m = £71,500; £10m–£20m = £143,550; above £20m = £287,500. Properties below £500,000 are not subject to ATED. These figures are typically updated each year in line with CPI inflation.

What reliefs are available from ATED?

Several reliefs can reduce ATED to nil, including: property rental business relief (property let to unconnected tenants at a commercial rent), property development relief (acquiring for development and resale), property trading relief, farmhouses occupied by working farmers, properties open to the public, and properties occupied by employees for business purposes. A relief return must still be filed annually.

When must ATED returns be filed?

ATED returns must be filed and tax paid by 30 April for each chargeable period (which runs from 1 April to 31 March). For newly acquired or newly chargeable properties, returns and payment are due within 30 days of the effective date of acquisition. Late filing incurs automatic penalties starting at £100.

Does ATED apply to non-residential property?

No. ATED only applies to residential property — defined broadly as a dwelling that is or could be used as a private residence. Commercial property, land without a dwelling, property under construction (that has never been a dwelling), and property being converted from residential to non-residential are all outside the scope of ATED.