ATED is an annual charge on UK dwellings worth more than £500,000, owned through a company, a partnership with a company partner, or a collective investment scheme such as a unit trust. For 2026/27 the charge runs from £4,600 to £303,450 a year, depending on the band. Most small companies pay nothing: their property was worth £500,000 or less at its valuation date, or a relief — above all, commercial letting — reduces the charge to £0. But £0 is not nothing to do: a relieved company must still file a return every year. Individuals and trusts owning property directly are never in ATED.
This guide reflects HMRC guidance as reviewed on 2 November 2026. Charges are for the 2026/27 chargeable period (1 April 2026 to 31 March 2027) unless stated.
ATED in short: check the property’s 1 April 2022 value before today’s price. If the company lets commercially to unconnected tenants, the charge is usually £0 — but a Relief Declaration Return is still due by 30 April. Diarise two dates: 30 April 2027 (next deadline) and 1 April 2027 (the revaluation deciding who is caught from 2028/29).
The ATED charges for 2026/27
The 2026/27 charge is a flat amount set by the band your property’s value falls into — it is not a percentage of the value. This is HMRC’s published table for 1 April 2026 to 31 March 2027, with last year’s amounts alongside for late 2025/26 filers.
| Property value | Annual charge 2026/27 | Annual charge 2025/26 |
|---|---|---|
| More than £500,000 up to £1 million | £4,600 | £4,450 |
| More than £1 million up to £2 million | £9,450 | £9,150 |
| More than £2 million up to £5 million | £32,200 | £31,050 |
| More than £5 million up to £10 million | £75,450 | £72,700 |
| More than £10 million up to £20 million | £151,450 | £145,950 |
| More than £20 million | £303,450 | £292,350 |
Three features of this table catch small companies out:
- The amounts rise every year. Section 101 of the Finance Act 2013 uprates the charges with the Consumer Prices Index, so last year’s table is always wrong. If a guide shows £4,450 — or worse, £3,800 — as the lowest band, it is showing 2025/26 or 2022/23 figures. Do not file from it.
- The band edges are cliffs, not slopes. A dwelling valued at £1,000,000 pays £4,600. The same dwelling valued at £1,010,000 pays £9,450. A £10,000 difference in value costs £4,850 a year until the next revaluation.
- The charge is per dwelling. Three in-scope flats mean three charges and three chargeable returns.
Who has to pay ATED — and who does not
Four things must all be true: the property is a dwelling, it is in the UK, its value at the valuation date that applies was more than £500,000, and it is owned wholly or partly by a company, a partnership in which any partner is a company, or a collective investment scheme — the test in section 94 of the Finance Act 2013, the Act that created ATED.
The owners who are caught
A UK or non-UK company can be the owner — residence makes no difference — and owning only part of the dwelling still counts. Two owner types are easy to miss: a family partnership becomes an ATED owner the moment a company joins as a partner, and collective vehicles such as unit trusts are caught in their own right.
The owners who are never caught
Individuals and trusts holding property directly are outside ATED entirely — the tax needs a non-natural person. Some buildings are not dwellings at all, whoever owns them: hotels, guest houses, boarding school accommodation, hospitals, student halls, military accommodation, care homes and prisons. A dwelling does include its gardens and grounds. For mixed-use property — a shop with a flat above — only the residential part is valued.
Exempt entities: no charge and no return
Some owners are exempt, which is stronger than relieved: charitable companies using the dwelling for charitable purposes, public bodies, and bodies established for national purposes are outside ATED and file nothing. An exempt owner does nothing; a relieved owner must file a return to claim the £0.
The valuation date decides your band — not today’s price
Your 2026/27 charge is based on the property’s value on 1 April 2022 — or the price paid if the company bought it later — not on what it is worth now. Revaluations every five years fix values for the five chargeable periods that follow.
| Revaluation date | Chargeable periods it governs |
|---|---|
| 1 April 2012 | 2013/14 to 2017/18 |
| 1 April 2017 | 2018/19 to 2022/23 |
| 1 April 2022 | 2023/24 to 2027/28 (the current cycle) |
| 1 April 2027 | 2028/29 onwards |
This cuts both ways. A house worth £4.8 million on 1 April 2022 that would sell for £5.5 million today is still charged in the £2 million to £5 million band for 2026/27 — £32,200, not £75,450. Equally, a property worth £480,000 in April 2022 stays outside ATED for the whole cycle, however far its value has climbed.
The 1 April 2027 revaluation is now close
Values reset on 1 April 2027, first biting for 2028/29. A dwelling under £500,000 in 2022 but over it in April 2027 joins the charge from April 2028, and dwellings near a band edge can jump a band. If your company owns property anywhere near £500,000 or £1 million, line up a defensible valuation during 2027 rather than scrambling in early 2028.
Banding checks and part disposals
You do not have to use a professional valuer, but the value is self-assessed and must be a specific figure you can defend — HMRC can challenge it, with penalties if it is wrong. If your valuation falls within 10% of a band threshold (£450,000–£550,000 for the £500,000 threshold) and no relief takes your charge to nil, HMRC offers a pre-return banding check through its online form — ask in good time, because a pending check does not extend your deadline. Selling off part of the property, such as a piece of garden, also forces a revaluation at market value on the disposal date, which then applies until the next fixed revaluation date.
Reliefs: how the charge legitimately becomes £0
Nine reliefs can reduce the charge, and for most small companies one of them — property rental business relief — does nearly all the work. Every relief has conditions — sections 30 to 41 of HMRC’s ATED technical guidance — and must be claimed on a return.
| Relief | Who it is for | Return still required? |
|---|---|---|
| Property rental business | Dwellings let commercially to unconnected third parties | Yes — Relief Declaration Return |
| Property developers | Dwellings being developed for resale | Yes — Relief Declaration Return |
| Property traders | Dwellings held as trading stock for resale | Yes — Relief Declaration Return |
| Open to the public | Dwellings open to the public at least 28 days a year | Yes — Relief Declaration Return |
| Financial institutions | Dwellings repossessed in the course of lending | Yes — Relief Declaration Return |
| Home reversion plans | Dwellings acquired under a regulated home reversion plan | Yes — Relief Declaration Return |
| Employee accommodation | Dwellings housing qualifying employees of a trading business | Yes — Relief Declaration Return |
| Farmhouses | Farmhouses occupied by a farm worker or former long-serving farm worker | Yes — Relief Declaration Return |
| Social housing | Registered social housing providers or qualifying housing co-operatives | Yes — Relief Declaration Return |
Property rental business relief
Under section 133 of the Finance Act 2013, a day counts as relieved when the dwelling is let as a source of rent in a property rental business run on a commercial basis and with a view to profit. Genuine gaps do not break it: empty days are still relieved if steps are being taken to let the property again without undue delay — including refurbishment between tenants.
The connected-person trap
Rental relief has one condition that destroys it in practice: under section 133(2), a day is not relieved if a non-qualifying individual — someone connected with the owner — is permitted to occupy the dwelling that day. Permission is what counts, not just actual stays: a standing arrangement letting the director’s family use the flat is enough, and it applies even at a full market rent. Because returns are filed in advance each April, occupation later in the year means amending the return and paying for the days that stopped being relieved. One family stay can turn a £0 year into a charged one.
The other reliefs in brief
Developers and traders holding dwellings for resale, owners who open a dwelling to the public at least 28 days a year, lenders holding repossessed property, and providers of farmhouse or employee accommodation can all reach £0 the same way: meet the conditions, then claim.
Relief is claimed, never automatic
If a relief reduces your charge to nil, claim it by submitting a Relief Declaration Return through the ATED online service by the same deadline as a chargeable return; one declaration can cover several properties claiming the same relief. Relief can also cover part of a year, worked out day by day — so keep records of tenancy dates and any connected occupation.
Deadlines: ATED is paid in advance, in April
ATED runs the opposite way to most UK taxes: the chargeable period is 1 April to 31 March, and the return and payment are due at the start of the period, not after it ends.
| Situation | Return and payment due |
|---|---|
| Dwelling held on 1 April | By 30 April, at the start of the chargeable period |
| Dwelling acquired during the period | Within 30 days of acquisition |
| Newly built dwelling | Within 90 days of the earlier of first occupation or the date it becomes a dwelling for Council Tax purposes |
Read those dates against where we are now. The 2026/27 deadline — 30 April 2026 — has passed, so anyone who should have filed and did not is already in penalty territory; the examples below show what that costs. Everyone else should prepare for 30 April 2027, the 2027/28 deadline, and register for the ATED online service well before April. Our small business tax deadlines calendar puts 30 April alongside the year’s other fixed dates.
Worked examples: what small companies actually pay
Four cases on 2026/27 charges, covering the patterns small companies actually fall into: the director’s house, the larger enveloped home, the let property that pays nothing, and the mid-year purchase.
Example A — The director’s house: £4,600 a year
A small consultancy company owns the house its director lives in, valued at £750,000 on 1 April 2022 — the “more than £500,000 up to £1 million” band, so the charge is £4,600 for 2026/27. No relief helps: the director is connected with the owner and occupies the property, so rental relief cannot apply, and no other relief fits. The company pays it every year of the cycle, at each year’s uprated amount. The occupation can separately be taxed as a living-accommodation benefit — see our benefits in kind guide — but that is a second bill, not a reason the ATED charge falls away.
Example B — The £3 million house: £32,200 a year
Same structure, bigger property: a dwelling valued at £3,000,000 on 1 April 2022 sits in the “more than £2 million up to £5 million” band and costs £32,200 for 2026/27. Held flat purely for illustration — real figures rise with CPI yearly — five years comes to about £161,000: enough to make directors ask whether the property should be in the company at all.
Example C — The let flat: £0, but £1,600 if you forget the paperwork
A property company owns a flat valued at £750,000 on 1 April 2022, let all year on commercial terms to an unconnected tenant, with nobody connected to the company occupying it or able to occupy it. The gross charge is £4,600; rental relief reduces it by 100%; amount payable: £0 — provided the Relief Declaration Return is filed by 30 April. File it 12 months late instead, and the late-filing penalties under Schedule 55 of the Finance Act 2009 come to £1,600: £100 for filing late at all, £900 of daily penalties (£10 a day for up to 90 days from three months late), then £300 at six months and £300 more at twelve months — the £300 minimum each time, because 5% of a £0 tax bill is £0. A year of forgetfulness costs £1,600 on a tax bill of nothing.
Example D — The mid-year purchase: about £16,056
A company buys a dwelling for £3,000,000, completing on 1 October 2026, with no relief available. Under section 99 of the Finance Act 2013, a company coming into the charge part-way through a period pays a fraction of the annual amount — days from acquisition to the period’s end, over days in the period. From 1 October 2026 to 31 March 2027 is 182 days, out of 365. So the charge is £32,200 × 182/365 ≈ £16,056, payable with the return within 30 days of acquisition — by 31 October 2026. The banding value is the acquisition price, because the property was bought after 1 April 2022.
| Example | Value (at 1 April 2022 or purchase) | Band charge | Relief | Actually payable |
|---|---|---|---|---|
| A — Director-occupied house | £750,000 | £4,600 | None available | £4,600 a year |
| B — Enveloped house | £3,000,000 | £32,200 | None available | £32,200 a year |
| C — Commercially let flat | £750,000 | £4,600 | Rental relief, 100% | £0 (return still due) |
| D — Bought 1 October 2026 | £3,000,000 | £32,200 | None available | ≈£16,056 for the part year |
Sidebar: the envelope decision is made at purchase, not in April
ATED is not the first tax a company meets on an enveloped home. Under GOV.UK’s guidance on SDLT for corporate bodies, a company buying a residential property for more than £500,000 pays SDLT at a flat 17% unless a relief (broadly mirroring the ATED reliefs) applies. On £750,000 with no relief, that is £127,500 on day one, against £4,600 a year of ATED. The 17% rate applies instead of the higher residential rates, so the 5% additional-property surcharge is not stacked on top. Even ten years of ATED at today’s amount (£46,000) costs less than the entry charge. A mixed-use purchase — a shop with a flat above — is taxed at non-residential rates instead; our guide to stamp duty on commercial property works through those.
Risks and common mistakes
Most ATED losses are self-inflicted paperwork failures rather than the tax itself. The ones that cost small companies money:
- Assuming £0 means nothing to file. Relief is never automatic: no Relief Declaration Return means no relief — and, as Example C shows, the Schedule 55 penalty ladder applies in full, reaching £1,600 within a year on a nil bill.
- Letting connected people stay. A director, a shareholder or their family staying — rent-free or at full market rent, for a weekend or a season — makes those days non-relieved under section 133(2): they were permitted to occupy.
- Living in the company house without budgeting for it. The director-occupied house is the classic real cost (Example A): the full band charge every year, plus a possible benefits-in-kind charge on top.
- Filing from a stale rate table. Charges rise with CPI every year, and older guides still show £4,450 or £3,800 as the lowest band. File from HMRC’s table for the correct year.
- Paying late even when the return is on time. Late payment carries its own penalties — 5% of the unpaid tax once a month overdue, with further 5% penalties as the delay lengthens — plus interest. If a penalty lands, you have 30 days from HMRC’s decision to appeal: our guides to HMRC late filing penalties and the HMRC penalty appeal process explain how.
- Ignoring the 2027 revaluation. A property safely under £500,000 on 2022 values joins the charge from 2028/29 if over the threshold on 1 April 2027. Leaving valuation evidence until 2028 invites a dispute you cannot document.
- Trying to fix the envelope backwards. Taking a dwelling out of a company is itself a disposal that can trigger SDLT and Corporation Tax on gains — and ATED-related CGT, abolished from 6 April 2019, no longer changes that. De-enveloping is sometimes right, but never do it on the back of an ATED bill alone.
Conclusion
For most small companies, ATED is not a tax they pay — it is a filing obligation they can fall over. Work through three questions. Was the property worth more than £500,000 on 1 April 2022, or when you bought it? If not, you are outside ATED until the 2027 revaluation. If it was, does a relief — usually commercial letting to unconnected tenants — take the charge to £0, and have you filed the Relief Declaration Return to claim it? And is anyone connected with the company living in, or able to live in, the property? Answer those, diarise 30 April 2027, and gather valuation evidence for 1 April 2027. If the company is paying £4,600 or £32,200 a year for a home someone lives in, take advice on the structure itself — our guide to closing a limited company and its tax implications covers the exit end of that conversation.
Frequently asked questions
Do I pay ATED on a property worth less than £500,000?
No — and there is nothing to file. The test is the value at the valuation date that applies (1 April 2022 for the current cycle, or the acquisition price if the company bought later), not today’s asking price. A property under the threshold in 2022 stays out until the 1 April 2027 revaluation, even if it is worth more now.
My company lets its property out. Do I still have to do anything?
Yes. Commercial letting to unconnected tenants usually reduces the charge to £0 through rental business relief, but the relief must be claimed on a Relief Declaration Return filed by 30 April. No return, no relief — and penalties follow.
When is the ATED deadline?
30 April, at the start of the chargeable period (1 April to 31 March), for property held on 1 April. Buy during the year and it is 30 days from acquisition. New builds get 90 days from the earlier of first occupation or Council Tax dwelling status.
What value is my property taxed on — what it is worth now?
No. For 2026/27 it is the 1 April 2022 value, or the price paid if the company bought after that date. Values reset at the next revaluation on 1 April 2027, applying from 2028/29.
Can I live in a house my company owns without paying ATED?
Generally no, if the property was worth more than £500,000 at its valuation date. Occupation by the director — a person connected with the owner — blocks rental business relief, so the full band charge applies: £4,600 a year at a £750,000 value, £32,200 at £3 million (2026/27). Your occupation may also be taxed separately as a benefit in kind.
What happens if I file my ATED return late?
Penalties start at £100 and climb: £10 a day from three months late, up to £900, then the greater of 5% of the tax due or £300 at both six and twelve months. A Relief Declaration Return filed a year late costs £1,600 even though the tax due is £0. Interest runs on charges paid late, and late payment has its own 5% penalties.
Is there still ATED-related capital gains tax when the company sells?
No. ATED-related CGT was abolished for disposals from 6 April 2019. A company selling an enveloped dwelling pays Corporation Tax on the gain instead.
This article is general information about ATED for small companies, not tax advice. ATED turns on values, ownership structures and relief conditions that vary case by case — take professional advice before buying, selling or restructuring a property held through a company.
