The Annual Tax on Enveloped Dwellings (ATED) is a yearly charge on UK residential property worth more than £500,000 that is owned by a company, a partnership with a company member, or a collective investment scheme. For the period 1 April 2026 to 31 March 2027 the charge starts at £4,600 and rises to £303,450 for homes worth over £20 million. Returns and payment are due by 30 April, and a relief declaration return is still needed when a relief cuts the bill to nil.
What is ATED and who has to pay it?
ATED is an annual tax aimed at homes held inside a corporate “envelope” rather than owned directly by individuals. HMRC guidance says it is payable mainly by companies that own UK residential property valued at more than £500,000. It also applies to partnerships where one or more partners is a company, and to collective investment schemes.
If you own a property in your own name, ATED does not apply to you. It is also separate from corporation tax: a company can owe ATED even in a year when it makes no taxable profit. Family investment companies holding a house or flat are often caught, and many are also close companies with their own rules. See our accountancy and tax guide for the wider picture.
How much is ATED for 2026/27?
The charge is a fixed amount set by the value band the property falls into. These are the annual chargeable amounts for the period 1 April 2026 to 31 March 2027, with the previous year shown for comparison.
| Property value | 1 April 2026 to 31 March 2027 | 1 April 2025 to 31 March 2026 |
|---|---|---|
| More than £500,000 up to £1 million | £4,600 | £4,450 |
| More than £1 million up to £2 million | £9,450 | £9,150 |
| More than £2 million up to £5 million | £32,200 | £31,050 |
| More than £5 million up to £10 million | £75,450 | £72,700 |
| More than £10 million up to £20 million | £151,450 | £145,950 |
| More than £20 million | £303,450 | £292,350 |
Why do the charges go up every year?
The amounts rise automatically each April in line with the previous September’s Consumer Price Index. The Budget 2025 rates annex confirmed a 3.8% increase from 1 April 2026, based on September 2025 CPI. Always check the table for the right chargeable period.
Which property valuation should I use?
The band is based on the property’s value at a set valuation date, not its value today. If the company owned the property on or before 1 April 2022, it uses its value on 1 April 2022. If the property was bought after that date, the valuation date is the date of acquisition.
Valuation dates come round every five years under the legislation. The next one is 1 April 2027, and it will first be used for the chargeable period starting 1 April 2028. A property could then move band, so diarise a fresh valuation.
When is the ATED return due and when do I pay?
If the property is within ATED on 1 April, the return is due by 30 April in that chargeable period. Notice that this is at the start of the year, not the end: you file and pay in advance for the twelve months ahead.
- Property acquired later in the year: file within 30 days of acquisition.
- Newly built property: file within 90 days of the earliest date it becomes a dwelling for Council Tax purposes or is first occupied.
- Payment: the payment date is the same as the filing date, normally 30 April. If the deadline falls on a weekend or bank holiday, the money needs to reach HMRC by the previous working day.
- Amendments: an amended return is normally due within 12 months of the end of the chargeable period.
Do I need to file an ATED return if a relief applies?
Yes. This is the point most often missed. Where a relief reduces the charge to zero, the company must still submit a relief declaration return through the ATED online service. The good news is that you only need one return per relief, even if it covers several properties.
HMRC lists reliefs for property that is:
- let to an unconnected third party on a commercial basis (property rental business relief)
- open to the public for at least 28 days a year
- being developed for resale by a property developer
- held by a property trader as stock for resale
- repossessed by a financial institution in the course of its lending business
- acquired under a regulated home reversion plan
- used by a trading business to house certain qualifying employees
- a farmhouse occupied by farm workers
- owned by a registered provider of social housing or a qualifying housing cooperative
Certain charitable companies, public bodies and bodies established for national purposes are exempt altogether.
What can go wrong with property rental business relief?
Rental relief is the most common claim, and the most scrutinised. The business must be run on a commercial basis with a view to profit. If a connected person, such as a shareholder or a relative, lives in the property, the relief is lost for that time. A gap between tenants is not automatically covered either: the company needs to be actively trying to relet.
HMRC has been sending letters to companies that claimed rental relief while reporting little or no profit, asking them to show the letting was genuinely commercial. Keep evidence such as tenancy agreements, letting agent instructions and rent reviews on file each year.
What happens if the return is late or wrong?
HMRC can charge penalties and interest for late returns, late payment and inaccurate returns, and this applies to relief declaration returns as well as returns with tax to pay. Because ATED is charged per property, one missed filing over several years can add up quickly.
An ATED enquiry often widens into questions about the company’s wider affairs, and the professional time to answer HMRC is rarely small. Solar Protect tax investigation insurance covers up to £100,000 of your accountant’s fees for dealing with an HMRC enquiry, with no excess.
Frequently asked questions
Does ATED apply to property I own personally?
No. It applies to companies, partnerships with a company member and collective investment schemes. Individuals holding property directly are outside ATED.
Does ATED apply to commercial property?
No. It only applies to UK residential property (dwellings) valued at more than £500,000.
Is the ATED deadline 30 April even though the year has only just started?
Yes. ATED is filed and paid in advance for the chargeable period running 1 April to 31 March.
Can a relative live in a company owned property and still get rental relief?
Generally not. Occupation by a person connected with the owner stops property rental business relief applying for that period.
Own or advise a property owning company? Get a quote for Solar Protect tax investigation cover.
Reviewed by Matthew Bartlett, Director, Solar Protect. Last reviewed 29 September 2026. This guide is general information, not personalised tax or financial advice. Figures are correct for the 2025/26 and 2026/27 UK tax years at the time of writing.