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ATED returns for 2025/26

April 3, 2025

The annual tax on enveloped dwellings (ATED) is a tax that is payable mostly by non-natural persons (mostly companies) owning UK residential property valued at more than £500,000. Unless one of the exemptions applies, the company will need to file an ATED return and pay the associated tax.

The return

Where a property within the charge is held on 1 April 2025, the ATED return for the period from 1 April 2025 to 31 March 2026 must be filed by 30 April 2025. The return will normally be filed online using HMRC’s ATED online service. Where the return cannot be filed online, a paper form can be used. However, this must be requested from HMRC. Taxpayers using a paper form should allow two weeks for HMRC to receive it.

Where a property within the charge is acquired after 1 April 2025, the deadline is 30 days from the date on which the property came into charge.

It is important that the return is filed on time as penalties are charged for returns filed late.

Valuation

The ATED only applies to non-exempt residential properties valued at more than £500,000 at the valuation date. For properties owned on or before 1 April 2022, the key date is 1 April 2022. Where the property was acquired after this, the key date is the date of acquisition.

The tax

The amount of tax payable depends on the value of the property. The rates applying for 2025/26 are shown in the table below.

Property value Annual charge

More than £500,000 up to £1 million £4,450

More than £1 million up to £2 million £9,150

More than £2 million up to £5 million £31,050

More than £5 million up to £10 million £72,700

More than £10 million up to £20 million £145,950

More than £20 million £292,350

The tax for 2025/26 must be paid by 30 April 2025 (or within 30 days of the property coming into charge where later). The charge may be reduced if the property is only owned for part of the year.

Exemptions

The first point to note is that the charge only applies to dwellings. This is a property that is, or could be used, as a residence, such as a house or flat. Certain properties

do not count as dwellings for ATED purposes, including hotels and guest houses, boarding school accommodation, student halls of residence and care homes.

There are also a number of reliefs and exemptions which take certain properties outside the scope of ATED. For corporate landlords, the main exemption is that for properties that are let to a third party on a commercial basis and which are not, at any time, let to or occupied by anyone connected with the owner (such as a director shareholder of the property company). An exemption is also available for properties that are being developed by a property developer.

ATED

Dwellings

Tax on Enveloped Dwellings

Landlords Financial

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