If your company owns UK residential property worth over £500,000, it’s time to get familiar with ATED—the Annual Tax on Enveloped Dwellings.
ATED is a tax that applies to non-natural persons (mainly companies) that own high-value residential property. And with the 2025/26 return deadline fast approaching, it’s important to understand your responsibilities and avoid penalties.
Here’s what you need to know.
What Is ATED and Who Does It Apply To?
ATED is charged on UK residential properties held by:
- Companies
- Partnerships with a corporate partner
- Collective investment schemes
The charge only applies if the property is valued at more than £500,000, and none of the exemptions or reliefs apply.
Key Deadline: 30 April 2025
If your company owns a property within the ATED charge as of 1 April 2025, you must:
- File an ATED return for the period 1 April 2025 to 31 March 2026
- Pay the tax by 30 April 2025
The easiest way to file is via HMRC’s ATED online service. If you can’t file online, you’ll need to request a paper return—but make sure to allow at least two weeks for HMRC to receive it.
Bought a New Property After 1 April?
If your company acquires a chargeable property after 1 April 2025, you must:
- File the return within 30 days of the property coming into charge
- Pay the tax within the same 30-day window
Property Valuations: What Counts?
The ATED charge is based on the property’s value at a specific date.
- If the property was owned on or before 1 April 2022, that’s the valuation date.
- If it was bought after 1 April 2022, use the date of acquisition.
Only properties valued over £500,000 are within the ATED regime.
What Will You Pay? ATED Charges for 2025/26
Here’s how the charges stack up based on property value:
| Property Value | Annual ATED Charge |
| £500,001 – £1 million | £4,450 |
| £1 million – £2 million | £9,150 |
| £2 million – £5 million | £31,050 |
| £5 million – £10 million | £72,700 |
| £10 million – £20 million | £145,950 |
| Over £20 million | £292,350 |
If the property is only owned for part of the year, the charge is reduced proportionately.
Which Properties Are Exempt?
ATED only applies to residential dwellings—in other words, homes or flats that can be used as a place to live.
Some properties are excluded from this definition, such as:
- Hotels and guest houses
- Boarding schools
- Student halls of residence
- Care homes
There are also several exemptions and reliefs, especially for property businesses.
Common exemptions include:
- Let properties: If the property is let on a commercial basis to an unconnected third party and not occupied by the company’s owners or their relatives, it’s likely to be exempt.
- Property developers: If the property is being developed or held as stock for resale, it may qualify for relief.
Even if your property qualifies for a relief or exemption, you may still need to submit a return—just with the appropriate claim included.
Don’t Miss the Deadline
Filing your ATED return late can lead to penalties, even if no tax is due.
So, whether your company owns one flat or a portfolio of luxury properties, it’s vital to review your position and submit your return on time.
Need Help with Your ATED Return?
ATED can be a complex area—especially when exemptions and valuations come into play.
At Jon Davies Accountants, we help companies stay compliant, minimise unnecessary tax, and take the stress out of deadlines.
Get in touch with Jon or the team today to check whether ATED applies to your property and to file your return on time.
Contact us now to get started.
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Any questions?
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