If you hold UK residential property through a company, the Annual Tax on Enveloped Dwellings is an obligation you cannot ignore — even if you owe nothing. The single most common ATED failure we see is not unpaid tax; it is a missed Relief Declaration Return on a property where relief applied and no charge was ever due, triggering automatic penalties for nothing.
ATED is a yearly charge on UK residential property worth more than £500,000 owned by companies, partnerships with corporate members, and collective investment schemes. Charges for 2026/27 range from £4,600 to £303,450 by value band. Use our free ATED calculator to check your figure. Reliefs eliminate the charge for commercial letting, development and trade use — but a Relief Declaration Return must still be filed annually by 30 April. Individual personal ownership is never within ATED scope.
👉 Part of our foreign-investor series: ATED is one piece of the puzzle. For how it interacts with SDLT, CGT and IHT in a corporate structure, see our pillar guide: Investing in UK Property as a Foreigner 2026/27.
What ATED Is and Why It Exists
ATED was introduced in 2013 to discourage the use of corporate ownership structures ("enveloping") to hold high-value UK residential property. Before ATED, holding UK property through an overseas company offered both confidentiality and potential SDLT advantages on disposal (selling the company instead of the property). ATED was designed to remove the tax advantage by imposing an annual charge sufficient to make corporate ownership unattractive for personal-use properties.
Over time the regime has expanded — the threshold dropped from £2 million originally to £500,000 from April 2016, and the rates increase each year through CPI uprating (approximately 3.8% for 2026/27). The practical effect today is that any company holding UK residential property over £500,000 must consider ATED — and even where reliefs apply, the annual filing obligation remains.
Who Is Within ATED
ATED applies to "non-natural persons" holding interests in UK residential property valued at more than £500,000:
- A company (UK or overseas)
- A partnership where at least one member is a company
- A collective investment scheme (such as certain investment funds)
✅ Who is NOT within ATED
- Individual personal ownership — even if the property is worth £20 million
- Joint individual ownership
- Trusts where the trustees are individuals (specific structures still need checking)
- Partnerships consisting only of individuals
ATED Rates 2026/27
The annual charge is banded by property value. The bands and rates for the chargeable period 1 April 2026 to 31 March 2027 are:
| Property value band | Annual charge 2026/27 |
|---|---|
| £500,001 to £1 million | £4,600 |
| £1 million to £2 million | £9,500 |
| £2 million to £5 million | £32,200 |
| £5 million to £10 million | £75,300 |
| £10 million to £20 million | £150,950 |
| Over £20 million | £303,450 |
The charge applies for the full chargeable period (1 April to 31 March). If a property is acquired or disposed of part-way through, the charge is apportioned daily (the disposal date itself is not a chargeable day).
How Valuations Work — the Five-Year Cycle
ATED values are based on fixed five-yearly revaluation dates, not annual market value:
- The current valuation date for 2026/27 is 1 April 2022 (or the date of acquisition if later).
- That same 1 April 2022 valuation applies for all ATED periods from 2023/24 to 2027/28.
- The next revaluation date is 1 April 2027 — determining the band for 2028/29 to 2032/33.
- Properties acquired after 1 April 2022 use their acquisition price as the valuation.
- Substantial improvements or part-sales can trigger a revaluation outside the normal cycle.
Where a valuation falls within 10% of a band threshold (e.g. a property around £1.9 million, within 10% of the £2 million threshold), companies can apply to HMRC for a Pre-Return Banding Check (PRBC) for certainty before filing.
Company-owned property near a band threshold?
We handle ATED valuations, Pre-Return Banding Checks and relief declarations for overseas-owned structures.
The Reliefs — When ATED Is Reduced to Nil
ATED reliefs broadly mirror those available against the 17% SDLT corporate rate. Each reduces the chargeable amount to nil, but the annual return obligation continues.
Property rental relief
The most commonly relevant relief. It applies where the property is commercially let to a third party on arm's-length terms:
- The property is let, or held for letting, to a third party.
- That third party is not connected with the owner company or its beneficial owners.
- Letting is on commercial terms (arm's-length rent).
- The property is not used for non-qualifying purposes during the chargeable period.
Most legitimate buy-to-let companies fall within this relief and pay no ATED — but must still file. Other reliefs include property developer relief, property trader relief, employee accommodation relief, farmhouse relief, open-to-the-public relief and charitable purposes relief.
The Non-Qualifying Individual Rule
Most reliefs are subject to the condition that no "non-qualifying individual" occupies the property during the chargeable period. A non-qualifying individual typically includes the beneficial owner of the company, persons connected with the beneficial owner (spouse, children, parents, siblings), and certain trustees or settlors in the ownership chain.
⚠ The 'family use' trap
Many foreign investors buy through a company intending to let commercially. Where the beneficial owner or family then uses the property — even occasionally for personal stays — the relief is lost. We see this regularly: a £4 million property intended for commercial letting, where the family uses it for two weeks at Christmas. The £32,200 charge for that year becomes payable and the relief is lost retroactively. Even a single night of occupation by a non-qualifying individual can disqualify the relief for the entire period.
The Annual Return Obligation — Even When No Tax Is Due
The key principle: if your company owns UK residential property over £500,000, you must file an ATED return every year — regardless of whether relief reduces the charge to nil. There is no de minimis exemption from filing.
📋 The two types of return
- Standard ATED return — filed when ATED is payable; calculates the charge based on the appropriate band.
- Relief Declaration Return — filed when relief applies and no ATED is payable; identifies the relief claimed and confirms eligibility.
Filing deadlines: annual returns are due by 30 April at the start of the chargeable period (so the 2026/27 return is due by 30 April 2026). Returns for newly acquired properties are due within 30 days of acquisition. Penalties for late returns are automatic and start at £100 — severe given that, for a Relief Declaration Return, no tax was ever due.
⭐ Key Takeaways
- ATED catches company-owned UK residential property over £500,000 — never individuals.
- 2026/27 charges run from £4,600 to £303,450 by value band.
- Valuation is fixed five-yearly (1 April 2022 for now; next is 1 April 2027).
- Reliefs (mainly commercial letting) reduce the charge to nil — but you still must file.
- Any family/owner use can destroy the relief; even one night can be fatal.
- The 30 April annual return is mandatory and the late-filing penalty is automatic.
Frequently Asked Questions
Non-natural persons — companies (UK or overseas), partnerships with at least one corporate member, and collective investment schemes — holding UK residential property valued at more than £500,000. Individual personal ownership is never within ATED, even for a £20 million property.
Yes. If your company owns UK residential property over £500,000 you must file every year, even where relief reduces the charge to nil — you file a Relief Declaration Return instead of paying. Missing it triggers automatic penalties even though no tax was due.
From 1 April 2026 to 31 March 2027 the annual charge ranges from £4,600 (£500,001–£1m) up to £303,450 (over £20m), increasing through the bands in between.
ATED uses fixed five-yearly revaluation dates. The valuation date for 2026/27 is 1 April 2022 (or acquisition date if later), applying for all periods from 2023/24 to 2027/28. The next revaluation date is 1 April 2027.
📋 Register of Overseas Entities
A company within ATED that is an overseas entity also has ROE obligations. Our ROE guide and managed service covers registration, verification and the annual update.