From April 2025, updated ATED rates apply to residential properties held by companies and other Non-Natural Persons (NNPs). Make sure returns and payments are submitted by 30 April to avoid penalties. Reliefs may apply for commercial use.
The Annual Tax on Enveloped Dwellings (ATED) applies to NNPs who own interests in residential properties valued over £500,000. These provisions specifically affect entities such as companies, partnerships with company members, and managers of collective investment schemes, which are all classified as NNPs under the legislation.
Individuals who own property directly (rather than through a company) are not subject to ATED or ATED-related Capital Gains Tax (CGT). Furthermore, certain reliefs may be available if the property is used for commercial purposes.
Since 1 April 2025, ATED is charged based on the following property value bands:
|
Property Value Band |
Annual Tax Charge |
|---|---|
|
Over £500,000 but not exceeding £1 million |
£4,450 |
|
Over £1 million but not exceeding £2 million |
£9,150 |
|
Over £2 million but not exceeding £5 million |
£31,050 |
|
Over £5 million but not exceeding £10 million |
£72,700 |
|
Over £10 million but not exceeding £20 million |
£145,950 |
|
Over £20 million |
£292,350 |
For properties that were subject to ATED on 1 April 2025, both the return and payment must be submitted by 30 April 2025, covering the ATED period from 1 April 2025 to 31 March 2026. If a property is acquired after 1 April and falls within the scope of ATED, payment is due within 30 days of acquisition.
Penalties may be imposed for late filing, late payments, or inaccurate returns. Taxpayers have 30 days to appeal HMRC decisions, including penalties or determinations, by providing the grounds for the appeal.
