If your business owns UK residential property worth more than £500,000, you could be liable for the Annual Tax on Enveloped Dwellings (ATED).
Originally introduced to discourage holding property in corporate structures, ATED is an annual, self-assessed tax that applies to companies and certain partnerships – not individuals.
Key points to be aware of:
- Who it applies to: Companies (and similar entities) holding residential property over £500,000.
- Annual charges: Start from £4,600 (2026/27) and increase depending on property value, exceeding £300,000 for properties over £20m.
- Valuations: Properties must be revalued every 5 years, with the latest valuation date being 1 April 2022.
- Filing deadline: Typically 30 April each year, with tax payable at the same time.
- Penalties: Late filing can quickly become costly, starting at £100 and increasing over time, plus interest on unpaid tax.
Good news – reliefs are widely available
Many businesses won’t actually pay ATED if they qualify for reliefs, including:
- Letting property commercially
- Property development or trading
- Use by employees (under certain conditions)
- Social housing or farmhouses
However, a return is still required each year, even if no tax is due.
How we can help
ATED is often overlooked, particularly where no tax is payable due to reliefs. We can:
- Assess whether ATED applies to you
- Identify available reliefs or exemptions
- Handle valuations and submissions
- Ensure you remain fully compliant
If your company owns residential property, it’s worth reviewing your position now to avoid unexpected costs or penalties.
