ATED (Annual Tax on Enveloped Dwellings) is a tax payable by companies, partnerships with corporate members and collective investment schemes that own UK residential properties with a value of more than £500,000.
Who needs to complete ATED returns?
An ATED return is needed if the property:
- is in the UK.
- was valued at more than:
- £500,000 (on 1 April 2022 or on acquisition if later)
- is a dwelling:
- dwelling meaning part or all of the property could be used as a residence, for example, a house or flat. It includes any garden, grounds and buildings within them. Some properties are specifically excluded from the definition of ‘dwelling’. These include hotels, guest houses, boarding school accommodation, hospitals, student halls of residence, military accommodation, care homes and prisons.
- is owned completely or partly by a:
- company;
- partnership where any of the partners is a company; or a
- collective investment scheme – for example, a unit trust or an open-ended investment vehicle;
What you need to pay
The amount you will need to pay is worked out using a banding system based on the value of your property.
Chargeable amounts for 1 April 2025 to 31 March 2026
| Property value | Annual charge |
| More than £500,000 up to £1 million | £4,450 |
| More than £1 million up to £2 million | £9,150 |
| More than £2 million up to £5 million | £31,050 |
| More than £5 million up to £10 million | £72,700 |
| More than £10 million up to £20 million | £145,950 |
| More than £20 million | £292,350 |
Reliefs Available
You may be able to claim relief for your property if it is:
- let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner;
- open to the public for at least 28 days a year;
- being developed for resale by a property developer;
- owned by a property trader as the stock of the business for the sole purpose of resale;
- repossessed by a financial institution as a result of its business of lending money;
- acquired under a regulated home reversion plan;
- being used by a trading business to provide living accommodation to certain qualifying employees;
- a farmhouse occupied by a farm worker or a former long-serving farm worker; or
- owned by a registered provider of social housing or a qualifying housing co-operative.
If by claiming reliefs, your ATED charge is reduced to nil, you will need to submit a Relief Declaration Return.
Exemptions
You do not need to submit an ATED return if you are exempt. There are a small number of exemptions from the charge, and these include charitable companies, public bodies, bodies established for national purposes and dwellings conditionally exempt from inheritance tax. Further information on these exemptions can be obtained in the ATED technical guidance.
What do I need to do, and by when? ATED returns and payments are due by April 30 each year, with 2025/26 returns due by 30 April 2025. If a property is newly acquired and falls under ATED, then you have 30 days from acquisition to submit the return. Be aware that penalties may be incurred and interest charged if returns are not filed on time or liabilities paid.
If you require help with this process or have any queries on ATED, please contact us, email solutions@ellacotts.co.uk or call us on 01295 250401, and one of our tax advisers will be happy to assist to ensure that you remain compliant.
Information for readers: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore, no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm.
