Anna Lewis
- Legal Director
- Residential Property
Increases to Annual Tax on Enveloped Dwellings (ATED) announced
The Annual Tax on Enveloped Dwellings (ATED) will increase for the 2026–27 tax year, with charges rising in line with inflation. For companies and other non natural persons holding UK residential property valued above £500,000, the updated rates warrant a timely review of structures, reliefs and compliance obligations ahead of the 30 April filing deadline.
What is ATED?
ATED is an annual tax payable by ‘non‑natural persons’, such as companies, corporate partnerships and collective investment schemes, that own UK residential property valued at more than £500,000.
ATED was introduced in April 2013, and its original purpose was to deter the practice of “enveloping”, which means owning residential property through a company. At the time, properties held by companies provided certain tax advantages, some of which have since been countered.
Why are ATED charges increasing?
The annual ATED charges rise each year in line with inflation, as judged by the consumer price index (CPI).
For the coming year, the uplift is 3.8%.
Updated ATED charges for 2026–27
For the coming ATED year, the annual charges are:
| Property value | ATED Charge 2026–27 |
| £500,000 – £1 million | £4,600 |
| £1 million – £2 million | £9,450 |
| £2 million – £5 million | £32,200 |
| £5 million – £10 million | £75,450 |
| £10 million – £20 million | £151,450 |
| More than £20 million | £303,450 |
These bands apply whether the property is held for historic structuring reasons, privacy, succession planning, or via underlying nominee or enfranchisement structures to hold the freehold in a building.
What should property‑owning companies do next?
For ease, we will refer to non-natural persons as companies in this paragraph.
Companies should consider reliefs, for example, where a property is commercially let or held for development. If a relief does apply, a return must still be submitted.
All ATED returns and any payment due must be filed by 30 April 2026, unless the property is acquired after 1 April, in which case the return must be submitted within 30 days of acquisition.
We can also review whether holding a property via a company is still suitable.
This article is for general information purposes only and does not constitute legal advice or a comprehensive statement of the law. Specific legal advice should always be sought in relation to individual circumstances.
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