Capital Taxes - CGT and IHT

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 2022
    ATED charge 1 April 2023
    ATED charge 1 April 2024
    ATED charge 1 April 2025
    £500,001-£999,999
    £3,800
    £4,150
    £4,400
    £4,450
    £1m-£1,999,999
    £7,700
    £8,450
    £9,000
    £9,150
    £2m-£4,999,999
    £26,050
    £28,650
    £30,550
    £31,050
    £5m - £9,999,999
    £60,900
    £67,050
    £71,500
    £72,700
    £10m-£19,999,999
    £122,250
    £134,550
    £143,550
    £145,950
    £20m+
    £244,750
    £269,450
    £287,500
    £292,350
Note. Properties subject to ATED were required to be revalued at their 1 April 2022 value. This value must be used use to work out ATED for the five years starting 1 April 2023.