Answers · UK 2025/26
What is the Annual Tax on Enveloped Dwellings (ATED)?
ATED is an annual charge on UK residential property worth more than £500,000 held by companies, partnerships with corporate members, or collective investment schemes. For 2026/27 the charge ranges from £4,400 for properties worth £500,000 to £1 million, up to £269,450 for properties over £20 million.
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The Annual Tax on Enveloped Dwellings (ATED) applies when a residential property in the UK worth more than £500,000 is owned by a "non-natural person" -- typically a company, a partnership where at least one partner is a company, or a collective investment scheme. It was introduced to discourage holding high-value homes in corporate structures to avoid SDLT and other taxes. For 2026/27 the annual charges by property value band are: £500,001 to £1 million -- £4,400; £1 million to £2 million -- £9,003; £2 million to £5 million -- £30,550; £5 million to £10 million -- £71,500; £10 million to £20 million -- £143,550; over £20 million -- £269,450. These figures are increased broadly in line with CPI each year. ATED returns must be filed with HMRC by 30 April in the relevant chargeable period (1 April to 31 March), and the charge is paid up front. Properties are valued at the price they would fetch on the open market, and must be revalued every 5 years (next revaluation date is 1 April 2027). There are important reliefs. Properties commercially let to unconnected third parties, properties open to the public, and properties used in a property development trade are exempt from ATED, though you must still file a return to claim the relief. Partnerships of individuals (with no corporate partners) and individual ownership are entirely outside the scope. Failure to file or pay on time results in penalties and interest. ATED is separate from the 15% SDLT flat rate that applies when a company buys a residential property above £500,000. Use a property tax calculator and seek professional advice before placing residential property into a corporate structure.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.