Annual Tax on Enveloped Dwellings (ATED) Returns

What is ATED?

Annual Tax on Enveloped Dwellings (ATED) is an annual tax charged on UK residential property held by non-natural persons, such as companies, where the property is valued at more than £500,000. It was introduced by the Finance Act 2013 to discourage the use of corporate structures to hold high-value residential property in the UK.

When do I need to file ATED returns?

Companies that own an interest in a property valued at more than £500,000 must usually file an ATED return by 30 days from acquisition or by 30 April at the start of the relevant chargeable period, whichever applies first. For example, for the chargeable period from 1 April 2026 to 31 March 2027, the ATED return and any tax due must normally be submitted and paid by 30 April 2026. If a company acquires a property on 1 June 2026, the return and payment would generally be due by 1 July 2026.

New build rule: For newly built properties, the deadline is within 90 days of the earlier of:

Is it mandatory to file an ATED return even when no tax is due?

Yes, for all residential properties in the UK valued over £500,000 and owned by non-natural persons, such as a company or a partnership with a corporate member, ATED returns must be filed even when no tax is due.

How is ATED calculated, and are there any tax bands?

ATED is calculated by reference to the property’s market value at the relevant valuation date, which HMRC updates every five years. For the 2026/27 chargeable period, the property value is based on 1 April 2022 (or the purchase price if the property was acquired after that date). The next valuation date is 1 April 2027, which will apply to ATED charges for the period 1 April 2028 to 31 March 2033.

Are there reliefs available to reduce ATED liability?

Yes, several ATED reliefs can reduce or eliminate the the tax charge, but they must be actively claimed through an ATED return or Relief Declaration Return.

Key reliefs include:

What is the penalty for late filing of ATED?

Depending on the period of delay, fixed, daily and cumulative fines are applied for missing the ATED deadline.

ATED filing penalties are imposed for missing the return deadline, regardless of whether any tax is payable. Late payment penalties apply separately where ATED remains unpaid and commence 31 days after the payment due date.