Land and Buildings

Annual tax on enveloped dwellings

  • An annual tax on enveloped dwellings (ATED) is chargeable on residential property with a value of more than £500,000 that is owned by a company, partnership (having one or more companies as a member) or collective investment scheme. ATED is chargeable from 1 April 2013. The tax rate is set in bands according to the value of property value (see Notes). There are various reliefs, e.g. if let commercially to an unconnected third party, if held for charitable purposes, if held as part of a property development business, etc. There is a proportionate reduction in certain circumstances, e.g. ownership for only part of a year, change of use, etc.
  • There are linked CGT measures.
Notes.
  • The ATED rates are increased each year in line with the Consumer Prices Index (CPI).
  • Since 1 April 2016 the annual tax on enveloped dwellings (ATED) applies to property valued over £500,000 (£2m from 1 April 2013, £1m from 1 April 2015). As the name suggests it is an annual tax. The rate of charge is shown in the table below.
    Property values
    ATED charge 1 April 2018
    ATED charge 1 April 2019
    ATED charge 1 April 2020
    ATED charge 1 April 2021
    £500,001-£999,999
    £3,600
    £3,650
    £3,700
    £3,700
    £1m-£1,999,999
    £7,250
    £7,400
    £7,500
    £7,500
    £2m-£4,999,999
    £24,250
    £24,800
    £25,200
    £25,300
    £5m - £9,999,999
    £56,550
    £57,900
    £58,850
    £59,100
    £10m-£19,999,999
    £113,400
    £116,100
    £118,050
    £118,600
    £20m+
    £226,950
    £232,350
    £236,250
    £237,400
Note. All properties which are subject to ATED will need to be revalued again at 1 April 2017, and this valuation will then apply for to ATED returns for the five year periods starting 1 April 2018.