ATED: A Practical Guide for 2026/27

What is ATED?

ATED stands for Annual Tax on Enveloped Dwellings. ATED is an annual tax payable by companies that own single-dwelling UK residential property valued at more than £500,000 during one or more days in a chargeable period. This chargeable period runs from 1 April through to the following 31 March.

ATED returns are submitted in advance, with 2026/27 ATED returns being due for submission by 30 April 2026.

Annual charges

The amount payable will depend upon the value of the property. More details about these bands are given below.

Value of Property	Annual Charge
£500,000 – £1,000,000	£4,600
£1,000,000 – £2,000,000	£9,450
£2,000,000 – £5,000,000	£32,200
£5,000,000 – £10,000,000	£75,450
£10,000,000 – £20,000,000	£151,450
£20,000,000 or more	£303,450

Valuations

You carry out ATED valuations every five years, and each valuation remains in place for that full period. However, if you make a substantial acquisition or disposal of more than £40,000, you must obtain a new valuation at that point. The current revaluation date is 1 April 2022, or acquisition if later. The revaluation date will change to 1 April 2027 for 2028/29 ATED returns.

When a company owns a share of a property that falls into a higher‑rate band, it becomes jointly and severally liable for its share of the ATED due on the property, rather than being assessed solely on the value of the share it owns. For example, if a company owns 10% of a £5,000,000 property, it is jointly and severally liable for its share of the band of ATED applicable for £5,000,000, rather than the annual charge applicable for £500,000.

Reliefs

Reliefs can apply to properties owned by companies in the following situations:

• Property letting relief: companies who have the main business activity of letting out properties
• Property development/trading: where the property is held as stock by a developer or an estate agent
• Open to public: needs to be for at least 28 days per year but will qualify for the whole ATED year
• Repossessed by financial institutions: where a bank repossesses a property if mortgage repayments are not kept up
• Employee / farmworker occupation: used by a trading business to provide living accommodation to qualifying employees: this must be in the course of the trade
• Qualifying examples are a caretaker in a block of flats or a farmhouse occupied by a farm worker or a former long-serving farm worker
• Owned by a registered provider of social housing

HMRC therefore treats the property owner as not being within the charge to ATED for their interest in the property. This treatment applies on any relievable day when the legislative conditions are met, so the owner must meet those conditions for every day in the ATED year that they hold the property.

Companies falling into one of these reliefs will have to submit a relief declaration ATED return, so there is still an administrative requirement. However, they are not subject to the charge.

Exemptions

• Charitable companies
• Public bodies
• Bodies established for national purpose

HMRC treats the property owner as not having a chargeable interest for the entire period. In these cases, they do not need to submit an ATED return.

HMRC

HMRC is writing to companies that may need to disclose ATED liabilities because they own UK residential property valued at over £500,000, and have not declared any profits in their tax returns, filed ATED returns claiming relief or have not filed returns.

If you fail to submit your return and pay the ATED charge to HMRC, you may incur late filing penalties and HMRC may apply late payment interest to the unpaid amount.

Payment of ATED

If ATED applies to a property you own on 1 April, you must file the return and pay the ATED charge by 30 April (within 30 days of the ATED year starting) to avoid penalties and interest.

If you purchase a property that falls within the scope of ATED, you must file the return and pay the charge within 30 days of the acquisition date.

For a newly-built property, there is an extension on this filing and payment date. It is 90 days from the earlier of:

• Your property becoming a dwelling for council tax purposes
• The property first being occupied

If you need more information or feel you may need to submit a return – we can help. Please contact your local Perrys branch.