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Annual tax on enveloped dwellings (ATED)

Most residential properties (dwellings) are owned directly by individuals. But in some cases a dwelling may be owned by a company, a partnership with a corporate member or other collective investment vehicle. In these circumstances the dwelling is said to be 'enveloped' because the ownership sits within a corporate 'wrapper' or 'envelope'.

ATED is a tax payable each year by companies on high value residential property (a dwelling). 

ATED charge

Property value at 1 April 2012 or acquisition 2017/18
More than £500,000 but not more than £1m £3,500
More than £1m but not more than £2m £7,060
More than £2m but not more than £5m £23,550
More than £5m but not more than £10m £54,950
More than £10m but not more than £20m £110,100
More than 20m £220,350

What is ATED?

Most residential properties (dwellings) are owned directly by individuals. But in some cases a dwelling may be owned by a company, a partnership with a corporate member or other collective investment vehicle. In these circumstances the dwelling is said to be 'enveloped' because the ownership sits within a corporate 'wrapper' or 'envelope'.

ATED is a tax payable each year by companies on high value residential property (a dwelling).

An ATED tax return is needed for your property if all of the following apply:

  • it's a dwelling (see below for definition)
  • it's situated in the UK
  • it was valued at more than £2 million on 1 April 2012, or at acquisition if later
  • it's owned, completely or partly, by a company, a partnership where one of the partners is a company, or a 'collective investment vehicle' - for example, a unit trust or an open ended investment company.

There are reliefs that could reduce the tax completely but you can only claim them if you complete and send in a return.

There are also a number of exemptions from the tax, most significantly, charitable companies using the dwelling for charitable purposes, which mean you may not have to file a return.

The amount of ATED is worked out using a banding system based on the value of your property. You need to find out which band the value of your property falls into. Properties will be revalued with effect from 1 April 2017 for use in the 2018/19 ATED year.

Disposals of ATED property are potentially subject to capital gains tax at 28%.