Guide to Annual Tax on Enveloped Dwellings (ATED)

The Annual Tax on Enveloped Dwellings (ATED) is a yearly charge on UK residential property worth more than £500,000 when a company, a partnership with a company member or a collective investment scheme owns it.

If you own the property in your own name, ATED does not apply to you. If you do own through a company, you may still have to file an ATED return even when relief means you owe nothing.

Does ATED apply to your company?

You need to consider ATED if the property meets all of these tests:

• It is a dwelling, meaning all or part of it is used, or could be used, as a residence. This covers a house or flat and its gardens, grounds and buildings within them.
• It is in the UK.
• It was valued at more than £500,000 on the valuation date. The threshold generally applies per dwelling, subject to the valuation rules.
• It is owned wholly or partly by a company, a partnership where any partner is a company, or a collective investment scheme such as a unit trust or open-ended investment vehicle.

Some properties are not classed as dwellings, including hotels, guest houses, boarding school accommodation, hospitals, student halls of residence, military accommodation, care homes and prisons.

If a property is part residential and part commercial, you value the residential part. Self-contained flats in one building are generally valued separately. Linked dwellings and multiple interests in a property have additional rules, which GOV.UK sets out in its guidance on valuing different types of property.

ATED was introduced in the Finance Act 2013 to discourage high-value homes being held in a corporate “envelope”. It first applied to dwellings worth more than £2 million, and the threshold was lowered to £1 million for 2015/16 returns and to £500,000 for 2016/17 returns.

ATED charges for 2026/27

ATED is charged per dwelling for each chargeable period, which runs from 1 April to 31 March. The amount depends on the property’s value band. Charges are uprated each April, and these are the figures for 1 April 2026 to 31 March 2027, with the previous year for comparison:

Source: GOV.UK, Annual Tax on Enveloped Dwellings, checked 27 October 2026. The amounts change every April, so check the GOV.UK page before you file.

If you own the dwelling for only part of a year, or claim a relief for part of a year, the charge is adjusted. Sections 6 and 7 of the ATED technical guidance explain how.

Example: A company owns a flat valued at £750,000 and runs a commercial letting business with a view to profit, letting it to tenants who have no connection to the owners. The 2026/27 charge before relief is £4,600. If a rental relief applies for the whole year, the charge falls to nil, but the company still files a return to claim the relief.

How to value the property for ATED

You revalue every five years. The current valuation date is 1 April 2022, and it applies to the chargeable periods from 2023/24 to 2027/28.

• If you owned the property on or before 1 April 2022, value it as at 1 April 2022.
• If you acquired it after 1 April 2022, use the date you acquired it.
• The next fixed revaluation date is 1 April 2027, and it applies to chargeable periods beginning in April 2028.
• Some events in between, including part disposals and new dwellings, can require another valuation.

In some circumstances you can ask HMRC for a pre-return banding check.

Filing an ATED return and the deadlines

You file through HMRC’s ATED online service, where you can also appoint an agent. If you are not already registered, you register for the service first, then submit the return and pay anything due.

• Annual deadline. For a property in scope on 1 April, the return is due by 30 April. Payment normally falls due on the filing date.
• New acquisitions. If you acquire a property that falls within ATED part-way through the year, the return is generally due within 30 days of acquisition, and payment is due on that later filing date.
• New builds and conversions. A qualifying new build or conversion generally has 90 days.
• Further acquisitions under a declared relief. If you acquire another property covered by a relief you have already declared for that year, you may not need to take any further action.
• Nil returns. If a relief reduces your charge to nil, you still submit a return. GOV.UK calls this a Relief Declaration Return.

Returns can only be submitted on or after 1 April of the chargeable period.

ATED reliefs and exemptions

Several reliefs can reduce the charge to nil, but you have to claim them through the ATED online service, and each one has qualifying conditions. GOV.UK lists reliefs for property rental businesses, property developers and property traders, and the technical guidance sets out the conditions in sections 30 to 41. A relief is claimed in the return, which is why the nil return matters.

• Rental business relief. The property is let as part of a rental business that operates commercially with a view to profit, and is not occupied, or available for occupation, by anyone connected to the owner. Having unconnected tenants is not enough on its own.
• Property development. The property is being developed for resale by a property developer.
• Property trading. The property is held as stock of a property trading business, solely for resale.
• Open to the public. The property is open to the public for at least 28 days a year. Public access alone is not enough. The relief concerns qualifying commercial exploitation with a view to profit.
• Farmhouses. The property is a farmhouse occupied by a farm worker or a former long-serving farm worker, subject to the qualifying conditions.

Rental relief can also cover periods when the property is empty, provided qualifying steps are being taken to let it without undue delay and the other relief conditions remain satisfied.

There are also exemptions, for example for charitable companies using the dwelling for charitable purposes and for certain public bodies. If you meet the conditions for an exemption, you do not need to file a return.

ATED penalties

HMRC may charge penalties and interest if you do not file on time, do not pay on time or submit an inaccurate return. Fixed late filing penalties can apply even when no tax is payable, because the return itself is the obligation.

HMRC may charge these late filing penalties:

• Initially: £100.
• After three months: £10 a day for up to 90 days.
• After six months: an additional £300 or 5% of the tax liability, whichever is higher.
• After twelve months: another £300 or 5% of the tax liability, whichever is higher. Higher percentages can apply where information is deliberately withheld.

Late payment penalties and interest are separate from these late filing penalties.

If you disagree with an HMRC decision about a penalty, you can appeal. You have 30 days from the date of the decision.

Selling a property held in a company

ATED-related Capital Gains Tax no longer applies. It ended on 6 April 2019, and companies are now generally subject to Corporation Tax on taxable gains when they sell a UK residential property. A non-resident company that is not already registered may need to register for Corporation Tax.

Stamp Duty Land Tax applies in England and Northern Ireland. Some corporate purchases of residential property above £500,000 can attract a 17% rate, subject to reliefs. For more on stamp duty, see our guide to stamp duty for buy-to-let properties.

Keeping records for an ATED relief claim

A relief claim needs evidence that the conditions are met, such as tenancy agreements, rent records and expense records. Landlord Studio is rental accounting software, so it can hold those records, but they do not by themselves prove you qualify, and ATED returns are filed through HMRC’s ATED online service.

ATED: frequently asked questions

What does ATED mean?

ATED stands for Annual Tax on Enveloped Dwellings, a yearly charge on UK residential property worth more than £500,000 that a company, a partnership with a corporate member or a collective investment scheme owns.

Do I need to file an ATED return if I owe no tax?

Yes. If your property is in scope and a relief reduces the charge to nil, you still submit a Relief Declaration Return to claim it.

Does ATED apply to a property I own personally?

No. ATED applies to property owned wholly or partly by a company, a partnership with a corporate member or a collective investment scheme.

Related guides

• How rental income is taxed
• Landlord tax rates, reliefs and changes
• Capital gains tax on investment property