Annual Tax on Enveloped Dwellings (ATED)
The Annual Tax on Enveloped Dwellings is a yearly charge on UK residential property worth more than £500,000 that is held by a company, a partnership with a corporate member, or a collective investment scheme. It was introduced by the Finance Act 2013 to discourage holding homes through companies to avoid stamp duty, and it applies to a landlord's limited company or SPV exactly as to any other, with one important qualification: a property let commercially to unconnected tenants qualifies for relief, so most landlords owe nothing but must still file.
The charge
ATED is banded by property value and charged per property for each chargeable period, which runs from 1 April. As at September 2026 the bands start at £500,001 to £1 million and rise through £1 million to £2 million, £2 million to £5 million, £5 million to £10 million, £10 million to £20 million and over £20 million, with the annual charges uprated each April in line with CPI; the current amounts are on gov.uk. The value used is the property's value at the last fixed revaluation date, currently 1 April 2022, or at acquisition if later; the next revaluation date is 1 April 2027.
The rental relief
Property rental business relief removes the charge for a dwelling let on a commercial basis to a third party, or being prepared for or between such lettings, provided no connected person, such as a director or their family, occupies it. The relief is not automatic: the company must file a Relief Declaration Return each year to claim it, by 30 April of the chargeable period, and a late return attracts penalties even when no tax is due. A director who moves into a company-owned property loses the relief for the days of occupation and the charge becomes payable.
Other reliefs
Property development, property trading, farmhouses, and dwellings open to the public each carry their own relief, claimed the same way.
Not to be confused with
The 15% rate of stamp duty land tax that applies to a company buying a dwelling for more than £500,000 is a separate, one-off charge with its own rental-business relief; the rules and the relief conditions are set out in stamp duty for landlords. The tax charges on moving existing property into a company are under property incorporation tax.
From working with landlords across the UK who hold property through companies, the ATED failure we see is not tax owed but the return not filed: a £600,000 flat let to tenants owes nothing and still needs a Relief Declaration Return every April. Put the 30 April deadline in August's compliance tracker against the property, and have an accountant who handles company landlords file it; they are compared in the best accountants for landlords. Whether to form the company at all, and how, is in the best SPV formation services for landlords.
Last reviewed: September 2026.
