Annual Tax on Enveloped Dwellings

The Annual Tax on Enveloped Dwellings (ATED) is a tax payable by certain Non-Natural Persons (NNPs) that own interests in dwellings valued at more than £500,000. These provisions affect certain companies, partnerships with company members and managers of collective investment schemes described in the legislation as NNPs.

There is no ATED or ATED-related Capital Gains Tax payable if an individual owns a property directly, rather than through a company. There are also reliefs available if a property is used for commercial purposes.

HMRC has recently published updated statistics that breakdown the ATED receipts from 2024-25. ATED receipts in 2024-25 were £133 million and some 82% of ATED receipts were from London. The number of liable ATED declarations in 2024-25 was 5,210.

For the current year from 1 April 2026, ATED is chargeable based on the following property value bands:

• Properties worth over £500,000 but not exceeding £1 million: £4,600
• Properties worth over £1 million but not exceeding £2 million: £9,450
• Properties worth over £2 million but not exceeding £5 million: £32,200
• Properties worth over £5 million but not exceeding £10 million: £75,450
• Properties worth over £10 million but not exceeding £20 million: £151,450
• Properties worth over £20 million: £303,450

For properties that were subject to ATED on 1 April 2026, both the return and payment must be submitted by 30 April 2026, covering the ATED period from 1 April 2026 to 31 March 2027. If a property is acquired after 1 April and falls within the scope of ATED, payment is due within 30 days of acquisition. There are penalties for late filings, late payment or for an inaccurate return.

Our friendly Business and Tax Advisory experts are here to support you every step of the step of the way. Give them a call on 01380 723692 or email us here.