2025/26 ATED return deadline approaches

As the deadline approaches, we look at what action may be needed in the coming weeks on the Annual Tax on Enveloped Dwellings (ATED) returns for 2025/26.

The  Annual Tax on Enveloped Dwellings (ATED) is a tax normally payable by companies who own residential property in the UK. It should be a factor to consider when deciding on the structure of a business, where the assets involve residential property. There could also be other tax issues to bear in mind about residential property being held by a company, including benefit in kind implications if it is available for use by an employee or director. 

ATED can also have to be paid by other entities, including partnerships (if a partner is a company) and collective investment schemes, such as a unit trust or an open-ended investment vehicle. 

ATED return requirements  

For 2023/24 to 2027/28, ATED will be based on the value as it stands on 1 April 2022. The valuation of properties acquired after 1 April 2022 will be based on the value on acquisition. ATED is not payable for properties valued up to £500,000. 

ATED returns are due for submission by 30 April each year. When properties are acquired during a tax year, an ATED return must be completed within 30 days of acquisition covering the remainder of the ATED fiscal year and the property will form part of the annual return process thereafter. Different rules apply for newly built properties. 

Where an entity is exempt from ATED (including charitable companies using the dwelling for charitable purposes, qualifying public bodies and bodies established for national purposes), there is no need to file an ATED return. More details can be found in HMRC’s ATED technical guidance. 

ATED returns for 2025/26 will be due for submission by 30 April 2025, which is also the due date for any payment. It’s important to bear in mind that, unless the entity is exempt from ATED, an ATED return may be still required if no ATED is actually payable. For instance, to claim a relief to avoid an ATED charge being due. 

ATED liability for 2025/26  

The ATED liability for 2025/26 return is as follows: 

Property value	ATED 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 ATED charges for the past two years and earlier years are available on the HMRC website. 

Penalties will be charged by HMRC on late ATED returns or an inaccurate return. Penalties and interest will also be charged for late payments of ATED. 

What ATED reliefs are available? 

It may be possible to claim relief from ATED where the property is let on a commercial basis to a third party, the property is open to the public for 28 days or more per year, the property is in the process of being developed by a property developer for resale, the property is owned by a property trader as stock or the property has been repossessed by a financial institution. Relief from ATED may also be available where the property is a farmhouse used by a farm worker or former long-serving farm worker, the property is used by a trading business for employee accommodation for qualifying employees or the property is owned by a registered provider of social housing. 

Let us know your views 

We welcome your views, which help inform our work on consultations or other tax-related matters. We responded to many tax calls for evidence and consultations, as well as producing tax policy papers and reports. We also regularly attend meetings with HMRC at which service levels, delays and other issues are discussed, and we raise problems being encountered by members. 

Please get in touch to share your insights and feedback. 

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