Annual Tax on Enveloped Dwellings (ATED)

ATED is an annual tax payable by non natural persons ("NNP") that own UK dwellings valued at more than £500,000.

What is an NNP?

A NNP is any; company, partnership with corporate member or collective investment scheme.

What is a dwelling?

Generally, a dwelling is a "residential property". However, the specific criteria means a dwelling is a property that is:

Used all or in part as a residence.
Is in the process of being constructed or adapted as a residence.
Certain residential properties are not dwellings.
Undeveloped land is only subject to ATED in certain circumstances.

Who does ATED apply to?

You’ll need to complete an ATED return if you are an NNP, owning property and meet the property meets the below conditions:

is a dwelling (e.g. Hotel, Guest House, Hospital, Boarding School Accommodation, Student Halls, Care Homes, Prisons, Military Accommodation)
is in the UK
was valued at more than £500,000 (2017 onwards)
is owned completely or partly by a NNP

What are the deadlines for ATED?

ATED returns must be filed with HMRC on or after 1st April, and no later than 30th April for the upcoming tax year. So, for the 2024/2025 tax year, ATED returns must be filed with HMRC between 1st April 2024 and 30th April 2024.

What reliefs are available?

There are certain reliefs and exemptions from ATED which may mean you do not have anything to pay.

You may be able to claim relief for your property if it is:

- A rental property

- Open to the public for at least 28 days per year

- Being developed for resale by a property developer

- Held as stock by a property trader

- Repossessed by a financial institution

- Acquired under a regulated home reversion plan

- Being used to provide accommodation to certain qualifying employees

- A farmhouse occupied by a farm worker, or a former long-serving farm worker

- owned by a registered provider of social housing or a qualifying housing co-operative

Annual Tax

What if I don’t meet the relief conditions?

If no relief is available, the amount you’ll need to pay is worked out using a banding system based on the value of your property.

Chargeable amounts for 1 April 2024 to 31 March 2025

More than £500,000 up to £1 million £4,400

More than £1 million up to £2 million £9,000

More than £2 million up to £5 million £30,550

More than £5 million up to £10 million £71,500

More than £10 million up to £20 million £143,550

More than £20 million £287,500

What should I do?

If you think ATED might apply to you, or to find out more, please get in touch with our experts who will be happy to help assess your individual situation and provide advice accordingly.

Frequently Asked Questions:

Q. Are there any penalties for late filing of an ATED return?

A. You could be liable to penalties for late filing of, or late settlement of a liability arising from an ATED return. The penalties are calculated in reference to the amount of lapsed time from the deadline to the resolution, and could be in excess of £1,500 per tax year.

Q. None of the reliefs apply to me, how much will I have to pay?

A. For the 2024/2025 tax year, the annual charge for each property bracket is broken down as follows:

Property value	Annual charge
More than £500,000 up to £1 million	£4,400
More than £1 million up to £2 million	£9,000
More than £2 million up to £5 million	£30,550
More than £5 million up to £10 million	£71,500
More than £10 million up to £20 million	£143,550
More than £20 million	£287,500

Q. Do I need to file an ATED return?

A. If you're unsure if ATED might apply to you, why not get in touch with one of our experts, who will be happy to guide you through the conditions and possible reliefs you can claim.

Contact us below, if you need more help:

Like all of our blogs, we aim to help make the world of tax more understandable to those it impacts. If one person reads this and feels they have learned something, we consider that a success. If this blog has helped you, please let us know by providing feedback below:

Has this blog helped you?