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What is Annual Tax on Enveloped Dwellings (ATED)?
Last verified 31 October 2026
The Annual Tax on Enveloped Dwellings (ATED) is a yearly tax on UK residential property held by certain companies and similar owners. A return is needed for properties valued at more than £500,000.
Why it matters to landlords
It is paid mainly by companies, partnerships where any partner is a company, and collective investment schemes. The annual charge starts at £4,600 for properties valued between £500,000 and £1 million for 1 April 2026 to 31 March 2027. A landlord who holds a higher value house or flat in a company should check whether it applies.
There are reliefs. GOV.UK says a property let to a third party on a commercial basis can qualify, as long as nobody connected with the owner occupies it or can occupy it. If a relief reduces the charge to nil, you still have to submit a Relief Declaration Return through the ATED online service. Late returns can bring a penalty and interest.
Example
Ridgeway Lettings Ltd owns a flat worth £650,000 let to an unconnected tenant at a market rent. No one linked to the company can use it, so a relief applies. The company files a Relief Declaration Return for the ATED chargeable period starting 1 April 2026 and no tax is due.
Related terms
- Limited company buy-to-let
- Special purpose vehicle (SPV)
- Stamp Duty Land Tax (SDLT)
- Corporation tax
- Portfolio landlord