A house held in a company: the annual charge, the reliefs, and the 30 April return
The annual tax on enveloped dwellings is the charge most company owners meet only when a penalty notice arrives. It bites above £500,000, its reliefs are generous but must be claimed on a return, and a company whose charge is reduced to nil by relief still commits a filing failure if it files nothing. Here are the 2026/27 amounts, the valuation date that does not move next April, a change made in March 2026 that reopened claims everybody thought were dead, and the three deadlines in the order they arrive.
The charge falls on the interest, not on the person, and it starts above GBP 500,000
The annual tax on enveloped dwellings, universally shortened to ATED, is a yearly charge on UK residential property held inside a company rather than in an individual name. It was created by Part 3 of the Finance Act 2013 and section 94 catches three kinds of owner: a company entitled to the interest, a partnership one of whose members is a company, and a collective investment vehicle holding the interest for its own purposes. HMRC calls them non-natural persons, which is its own shorthand and not a phrase in the Act. Two points of scope matter. The table in section 99(4) puts the entry point at more than GBP 500,000, so a dwelling valued at precisely GBP 500,000 sits outside the charge and the GBP 500,001 shorthand in some published tables is a rounding rather than the test. And the charge attaches to each single-dwelling interest rather than to the company, so a company holding four qualifying dwellings has four charges to think about and, as you will see, potentially four returns.
The 2026/27 amounts, and the cliff edge between two of them
The chargeable period runs from 1 April 2026 to 31 March 2027. Section 101 indexes the amounts each year by the September consumer prices index and rounds the result down to the nearest GBP 50, which for this period produced a rise of 3.8 per cent. The six amounts are GBP 4,600 for a dwelling worth more than GBP 500,000 and not more than GBP 1 million; GBP 9,450 up to GBP 2 million; GBP 32,200 up to GBP 5 million; GBP 75,450 up to GBP 10 million; GBP 151,450 up to GBP 20 million; and GBP 303,450 above that. Note what the second and third of those do to each other. A dwelling valued at GBP 1,950,000 costs GBP 9,450 a year. The same dwelling valued at GBP 2,050,000 costs GBP 32,200. A hundred thousand pounds of valuation carries GBP 22,750 of annual tax, every year, until the next revaluation. Where a valuation lands within 10 per cent of a band threshold you can ask HMRC for a pre-return banding check, free and worth having in writing, though it has no statutory basis and is unavailable where a relief reduces the charge to nil.
Your valuation date is 1 April 2022, and it does not move next April
This is the point most commentary gets wrong, and getting it wrong costs a valuation fee for nothing or, worse, produces a return on the wrong figure. Section 102(2) makes 1 April 2012 a valuation date and then every 1 April falling five years, or a multiple of five years, after it: 2017, 2022, 2027. But section 102(2A), inserted by the Finance Act 2015, says that a day which is a valuation date only because of that five-yearly rule is treated as if it were not a valuation date for the chargeable period beginning with it. The five-yearly revaluation is therefore deliberately deferred by one period, so that owners have a year to get valuations done. The consequences are precise. The 1 April 2022 valuation governs five chargeable periods: 2023/24, 2024/25, 2025/26, 2026/27 and 2027/28. The next revaluation date is 1 April 2027, and it does not apply to the period beginning that day. It first bites for 2028/29, on the return due by 30 April 2028.
Between those dates, three things create a valuation and the market is not one of them
Rising prices never produce a new valuation date, and neither does an extension or a refurbishment that leaves one dwelling as one dwelling. Three other things do. The first is a transaction: a substantial acquisition or part-disposal of GBP 40,000 or more, a lease granted or extended, a strip of land bought or sold. That one carries a trap, because a part-disposal revalues what is left, and HMRC's own example shows a reduced interest coming back at a higher figure than the whole did. The second is section 124, which makes the completion day of a new dwelling, or the day it is first occupied if earlier, a valuation date in its own right. The third is section 125, which does the same for the day after a conversion is completed where an existing dwelling or dwellings become a different dwelling or dwellings through structural alteration, typically a house split into flats or flats knocked back into a house. Those last two are triggered by building work rather than by any transaction, and they catch developers. A company that turns a house into three flats and returns each flat on the 1 April 2022 value of the original house has filed on a figure the Act does not recognise.
Relief is generous, but it has to be claimed, and nil is not the same as nothing
Most company-held residential property qualifies for relief. Sections 133 to 150 cover a dwelling let to a third party on a commercial basis with a view to profit and not occupied by anyone connected with the owner; one open to the public for at least 28 days a year; one held by a property developer for redevelopment and resale, or by a property trader as stock; one repossessed by a lender; one occupied by qualifying employees or partners; a farmhouse occupied by a farm worker; a caretaker flat owned by a management company, which the summary guidance leaves out; and one owned by a registered provider of social housing or a qualifying housing co-operative. Here is the part that generates the penalties. Section 106(5) requires relief to be claimed, either in an ATED return or by amending one. Where the claim reduces the charge to nil, the vehicle is a relief declaration return, which under section 159A covers one type of relief and may cover any number of properties eligible for that type. A company with a let portfolio and a separate development site therefore needs two of them, not one, and a company with tax to pay on any property needs a full return for that property regardless. A company that owes nothing and files nothing has not made a saving; it has committed a filing failure. On HMRC's published penalty structure that is GBP 100 immediately, GBP 10 a day for up to 90 days once the return is three months late, then the greater of GBP 300 or 5 per cent of the liability at six months and again at twelve. Five per cent of nil is nil, so the GBP 300 minimums apply, and a nil charge comes to GBP 1,600.
A change made in March 2026 reopened claims everybody had written off
Section 106(3) of the Finance Act 2013 gives relief where the adjusted chargeable amount for a period turns out to be less than the amount originally charged, which is how a company that paid on a dwelling later found to be relievable gets the money back. Until this year that claim carried its own deadline in section 106(6), expiring at the end of the chargeable period following the one it related to. Miss it and the tax stayed paid, whatever the merits. Section 114 of the Finance Act 2026, which received Royal Assent on 18 March 2026, omits section 106(6) and provides that the amendment is treated as always having been in force. The time limit has not been extended. It has been removed, retrospectively, as though it had never existed. Before assuming a repayment, work out how the claim would actually be carried, because section 106(5) still requires it to be made in an ATED return or by amending one, and the amendment window in paragraph 3 of Schedule 33 survives untouched: the end of the next chargeable period after the one the return relates to, or three months after delivery where a late return goes in on or after 1 January in that following period. Where a chargeable return was delivered for an old period and that window has closed, removing section 106(6) does not by itself open a route back in. The periods worth pursuing are those where a return can still be amended, and those where none was ever delivered and a late one can now be filed carrying the claim, at the price of the penalties above.
An illustrative example: three months of the wrong occupier
The following figures are illustrative and not drawn from any client matter. A company owns a flat valued at GBP 1,400,000 on 1 April 2022, which puts it in the GBP 9,450 band for 2026/27. It is let to unconnected tenants on commercial terms all year, so property rental business relief applies, the charge is nil, and the company files a relief declaration return by 30 April 2026. Now change one fact. Between 1 July and 30 September 2026 the flat is made available to the sole shareholder's adult son while he looks for somewhere to live. He is a non-qualifying individual within section 136, which reaches far beyond the shareholder to relatives, relatives' spouses and settlors of connected trusts. Section 133(2) says a day is not relievable if on that day a non-qualifying individual is permitted to occupy the dwelling, and permitted is the operative word: availability, not use, is what breaks the relief. Ninety-two days out of 365 are lost, and the charge for those days is GBP 9,450 multiplied by 92 and divided by 365, or GBP 2,381.92. The relief declaration return already filed does not cure that: under section 160 the company must deliver a further return, the return of the adjusted chargeable amount, by 30 April 2027, and pay the tax then. Section 135 adds look-forward and look-back rules, but they are narrower than their name suggests and they do not bite here. They strip relief only from days that would otherwise be relievable because steps were being taken to let the property under section 133(1)(b), or because it was being prepared for sale under section 134, and sections 135(7) and 135(8) switch them off once a day of genuine letting falls in between. A flat let commercially before and after the son's stay therefore reopens no earlier year. A company relying instead on the steps-are-being-taken relief is in a very different position: there the look-forward reaches the rest of that period and the three chargeable periods after it, and the look-back, which needs actual occupation rather than mere permission, reaches the preceding one.
Three deadlines, in the order they arrive, and what decides the answer
Where the company owns the dwelling on the first day of the chargeable period, section 159(2) requires the return by the end of the period of 30 days beginning with that day, which is why 30 April is the date everybody quotes, and section 163 makes the tax payable on the same day. Count inclusively: the first day is day one, so an in-year acquisition on 10 June must be returned by 9 July and not by 10 July, and that 30 day clock is a different clock from the 14 days that stamp duty land tax allows for the same purchase. Where a new dwelling comes into existence, the period is 90 days from the earlier of the date it becomes a dwelling for council tax and the date it is first occupied. The two returns in a completion year look as though they collide, but section 159(3A) resolves it: where the 90 day return falls due after 30 April, the 30 April return for the following period is pushed back to that same later date, so they fall due together. One further point worth stating plainly: ATED-related capital gains tax was abolished for disposals from 6 April 2019, so any material still describing a separate charge on the sale of an enveloped dwelling is out of date and a company's gain now falls into corporation tax. Four things decide the position for any given property, and they are worth putting to your accountant before the next 30 April. Which valuation date applies, and can you see that valuation in writing. Which relief is claimed, and has a relief declaration return actually been filed for each separate type. Has any connected individual been permitted to occupy, for any period, in this year or the last. And has any transaction of GBP 40,000 or more, or any building work that created or divided a dwelling, touched the interest, because those, and not the market, are what force a revaluation.
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This article is general information only and does not constitute tax advice. Figures and dates are current as at the date of writing; any worked example is illustrative. Always consult a qualified adviser before acting.