Does your company own residential property?
Overview
The Annual Tax on Enveloped Dwellings (‘ATED’) rules apply to UK residential property/properties held in a company with a value in excess of £500,000 and an annual charge applies unless certain reliefs or exemptions can be claimed.
The filing and payment deadline for the 2026/27 tax year is 30 April 2026 and the charge for this year will be based on the value of the property as at 1 April 2022. The property must be revalued every five years, with the next revaluation due in 2027.
You can work out the value yourself or you can use a professional valuer, but it must be based on an open-market willing buyer, willing seller basis. Please note that HMRC may challenge your valuation and, if it is found to be incorrect, they can charge penalties and interest. If you are close to the threshold, a professional valuation may provide greater certainty, or a pre-return banding check (‘PRBC’) could be requested from HMRC.
A PRBC can be requested from HMRC where the estimated value of a dwelling is within 10% of an ATED threshold. This will confirm HMRC’s view as to whether ATED applies, and if so at what rate. Requests for PRBCs should be submitted as far in advance of the return due date as possible to avoid late filing. More information and the form to request a PRBC can be found here.
What are the charges for residential property owned by your company?
A fixed annual charge applies where a property falls within the ATED regime, calculated using its 2022 valuation (the last revaluation year as mentioned above). For 2025/26 tax will be due as follows:
| Property Value (£) | 1 April 2026 – 31 March 2027 |
| 500,001 – 1,000,000 | £4,600 |
| 1,000,001 – 2,000,000 | £9,450 |
| 2,000,001 – 5,000,000 | £32,200 |
| 5,000,001 – 10,000,000 | £75,450 |
| 10,000,001 – 20,000,000 | £151,450 |
| 20,000,001 + | £303,450 |
Not all properties will be subject to a charge, however, as there are certain exemptions and reliefs which apply. If an exemption applies (e.g. charitable companies, hotels, care homes, student halls of residence) no further action needs to be taken. If a relief applies, however, the company will still be required to file a return to claim the relevant relief. One of the most common reliefs is for properties let to third parties on a commercial basis, provided no connected persons occupy the property.
If you would like specific advice on whether the charge may apply to your company or if the company may be eligible for any exemptions or reliefs, please get in touch and we would be happy to assist.
