What is ATED and who does it apply to?

Annual Tax on Enveloped Dwellings (ATED) is an annual tax charged on UK residential properties worth more than £500,000 that are owned by companies, partnerships with a corporate member, or collective investment schemes. 'Enveloped' means held within a corporate envelope rather than by an individual directly. The tax was introduced in April 2013 to discourage the holding of high-value homes in corporate structures purely to avoid SDLT on subsequent sales. ATED applies to properties in England, Wales, Scotland, and Northern Ireland.

What are the ATED rates for 2026/27?

ATED rates are indexed annually by RPI. The estimated 2026/27 charges (subject to HMRC confirmation) are: £500,000–£1m: approximately £4,400; £1m–£2m: approximately £9,000; £2m–£5m: approximately £30,550; £5m–£10m: approximately £71,500; £10m–£20m: approximately £143,550; over £20m: approximately £287,500. These are annual flat-rate charges per property. Properties are valued on a five-yearly basis — the current valuation period runs to 1 April 2027 using 1 April 2022 valuations.

What reliefs are available to reduce or eliminate ATED?

Multiple reliefs can reduce ATED to nil for qualifying uses, but a return must still be filed (a 'relief return'): Property rental business relief — where the property is let commercially to third parties on arm's length terms; Property developer relief — where the property is held for development and resale; Property trading relief — where the company is carrying on a property trading business; Farmhouses; Social housing; Diplomatic buildings; Public bodies. The relief must be actively claimed via an ATED return — it is not automatic. Failure to file even a nil return can result in penalties.

When must the ATED return be filed?

For ongoing ATED liability: the return must be filed and tax paid by 30 April at the start of each chargeable period (1 April to 31 March). For a new acquisition during the year: the return and payment are due within 30 days of acquisition. For a new-build coming within the charge: within 30 days of first being occupied or available for occupation. Penalties apply for late filing: £100 automatic penalty from day 1. The chargeable period runs from 1 April to 31 March each year. Properties below £500,000 do not need to file.

How are ATED properties valued?

Properties are valued on a 5-yearly cycle for ATED purposes. The current valuation date is 1 April 2022, and these values apply for ATED years 2022/23 through 2026/27. The next valuation date is 1 April 2027 (applying from 2027/28). A property must be valued at its market value at the relevant date. Companies must self-assess the value. HMRC can challenge valuations and may impose higher charges if they consider the value understated. When a property is acquired, its acquisition price is used as the value until the next revaluation date.

What are the CGT implications of holding property in a company?

Companies pay corporation tax on gains from selling residential property (25% for most companies) rather than CGT at 18%/24%. However, the Annual Exempt Amount is not available to companies. Gains on ATED properties are subject to ATED-related CGT at a flat 28% (not the lower 24% that now applies to individuals for post-October 2024 gains) — this punitive rate applies to gains on properties that have been within the ATED charge. Additionally, a shareholder selling shares in a company holding residential property may face SDLT under the 15% flat rate regime and ATED charges reduce the commercial attractiveness of corporate ownership.

ATED Calculator 2026 — Annual Tax on Enveloped Dwellings

Last updated: March 2026

ATED Calculator 2025/26 and 2026/27

Find the annual ATED charge for residential properties held in companies, partnerships with corporate members, or collective investment schemes

Property Value Band Use the property's value at the most recent valuation date (1 April 2022 for periods to 2026/27)

Number of Properties in This Band

Relief Available?

ATED Annual Charges — Rate Table

Property Value	2025/26 Charge	2026/27 Charge (est.)
£500,001 – £1,000,000	£4,400	£4,550
£1,000,001 – £2,000,000	£9,000	£9,300
£2,000,001 – £5,000,000	£30,550	£31,550
£5,000,001 – £10,000,000	£71,500	£73,900
£10,000,001 – £20,000,000	£143,550	£148,300
Over £20,000,000	£287,500	£296,800

Note: 2026/27 figures are estimates based on RPI indexation from 2025/26 confirmed rates. Official 2026/27 figures will be confirmed by HMRC ahead of the 1 April 2026 chargeable period. Properties below £500,000 in value are outside the ATED regime entirely.

ATED Reliefs — When ATED Can Be Zero

Relief	Condition	Return Still Required?
Property rental business	Commercially let to unconnected third parties at arm's length	Yes — relief return
Property development	Held for development and resale in ordinary course of business	Yes — relief return
Property trading	Held as trading stock by property trading company	Yes — relief return
Farmhouses	Working farmhouse occupied by a working farmer	Yes — relief return
Social housing	Held for use as social housing by a registered social landlord	Yes — relief return
Diplomatic buildings	Used as an official diplomatic or consular premises	Yes — relief return

Expert Guide: Annual Tax on Enveloped Dwellings 2026

1. What Is ATED and Why Does It Exist?

ATED was introduced in Finance Act 2013 to address a perceived tax avoidance strategy whereby wealthy buyers would purchase high-value homes through corporate envelopes, then sell the shares in the company rather than the property itself. Selling shares attracted only 0.5% stamp duty (on shares) rather than the full SDLT on property. ATED, combined with the 15% SDLT flat rate on corporate purchases over £500,000 and ATED-related CGT at 28%, makes corporate ownership of residential property punitive unless a qualifying relief applies. The regime applies to single-dwelling interests — each property is assessed separately.

2. Who Must Register for ATED?

The following "non-natural persons" that own UK residential property worth over £500,000 must register for ATED: Companies (UK and overseas incorporated); Collective investment schemes (unit trusts, OEICs); Partnerships with at least one corporate member. Individual human beings — regardless of nationality — are not subject to ATED. ATED is a property-by-property charge; if a company owns three qualifying residential properties, it files three separate ATED returns and pays three separate charges. HMRC's ATED service is accessed online via Government Gateway.

3. Valuation: Five-Yearly Revaluation Cycle

Properties are valued for ATED on a rolling five-year cycle. The current valuation date is 1 April 2022, and values from that date apply to ATED years 2022/23 through 2026/27. The next valuation date is 1 April 2027 (applying from 2027/28 onwards). You must use the market value of the property at the relevant valuation date for self-assessment. Where a property is acquired after the valuation date, the acquisition cost is used until the next revaluation. HMRC can challenge valuations — professional valuation evidence (e.g., RICS report) is advisable for borderline properties, particularly those near the £500,000 threshold.

4. Property Rental Business Relief — Most Commonly Claimed

The most widely used relief is property rental business relief. This applies when: (1) the property is exploited as a source of rental income in a genuine property rental business; (2) the occupant is not a connected person (e.g. not a shareholder or their family member); and (3) the letting is at arm's length on commercial terms. A single let property held in a company typically qualifies. A company owning a property and letting it to its own director or major shareholder does NOT qualify — this is a key anti-avoidance rule. The relief must be actively claimed in an ATED return. Even if relief is claimed, the 15% SDLT charge on purchase remains unaffected.

5. ATED-Related CGT at 28%

Properties that have been within the ATED charge (i.e., not relieved) are subject to ATED-related CGT at 28% on disposal — a rate that is higher than the 24% now payable by individual higher rate taxpayers. This further increases the tax cost of corporate residential ownership. If a property was relieved from ATED (e.g., rental business relief), ATED-related CGT does not apply to that period — instead, normal corporation tax on property gains applies. Gains on properties that have been partly in ATED charge and partly relieved are apportioned accordingly. Always consider the CGT implications before acquiring residential property in a corporate structure.

6. The 15% SDLT Flat Rate on Corporate Acquisitions

When a company (or non-natural person) purchases a single UK residential dwelling for more than £500,000, a flat SDLT rate of 15% applies — rather than the standard residential bands. This is a further deterrent to corporate residential ownership. Reliefs are available to reduce to standard rates: property rental business relief, property development relief, property trading relief, and certain other conditions. The same reliefs that apply to ATED broadly apply to the 15% SDLT flat rate. However, the reliefs must be actively claimed and conditions must be met — if circumstances subsequently change (e.g., the property ceases to be let commercially), the relief may be withdrawn and the higher SDLT becomes due.

7. Existing SPVs — Considering De-Enveloping

Many existing SPVs with properties were set up before 2013 when ATED was introduced and the SDLT advantages existed. The ongoing ATED cost, ATED-related CGT, and management burden may make it commercially attractive to de-envelope — transferring the property out of the company to individuals. De-enveloping involves: (a) SDLT on the market value transfer (potentially with relief if transferring to the shareholders as part of a winding-up); (b) CGT in the company on any gain; (c) potential income tax or dividend implications on extraction. Professional tax advice is essential — de-enveloping is complex and the timing matters for both SDLT and CGT purposes.

8. Filing Penalties and Late Payment Interest

ATED carries significant penalties for late filing: £100 from day 1 of lateness; rising to £200 after 3 months; potentially 5% of tax geared penalties after 12 months; plus daily penalties in some cases. Interest runs on all unpaid ATED from the day after it was due. Crucially, even where relief eliminates the annual ATED charge to nil, a relief return must still be filed — failure to file a nil return attracts the same penalties as failure to file a chargeable return. HMRC has actively pursued ATED compliance cases. Ensure your corporate property portfolio has a robust filing calendar in place.

Worked Examples: ATED 2026/27

Example 1: Portfolio Company — 2 Properties, Different Bands

Property A: £1.5m value (band £1m–£2m). Property B: £3.5m value (band £2m–£5m). No reliefs claimed.

Property A ATED 2026/27: approx. £9,300
Property B ATED 2026/27: approx. £31,550
Total annual ATED: approx. £40,850
Two separate ATED returns required by 30 April 2026

Example 2: Property Rental Company — Relief Claimed

Company owns £2.5m residential property. Property is let commercially to unconnected tenants. Rental business relief claimed.

Gross ATED charge: approx. £31,550
Property rental business relief: full relief — charge reduced to £0
ATED return still required: Yes — relief return by 30 April
15% SDLT would have applied on purchase unless relief was also claimed at acquisition

Official Sources

UK Calculator Editorial Team

Our calculators are maintained by qualified accountants and financial analysts. All tools use official HMRC data. Learn more about our team.

Last updated: March 2026 | 2026/27 ATED charges estimated pending HMRC confirmation

ATED Calculator