A tax on the wrapper, not the house
ATED was introduced to discourage enveloping, the practice of holding high value UK homes inside a company or other corporate wrapper. Three conditions bring a property into scope: it is residential, it is owned by a company, a partnership with a corporate member or a collective investment vehicle, and it is worth more than £500,000. Where the company is incorporated and where its owners live make no difference, which is why cross-border owners are caught so often: a non-resident family holding a London flat through an offshore company is squarely within the charge. The full band table, filing timetable and reliefs are in our ATED and non-resident surcharges guide.
The charge, the valuation date and the unusual deadline
The tax is not a percentage of value. It is a fixed amount set by the band your property falls into, from £4,600 to £303,450 for 2026/27, and the charges rise each year with the previous September's CPI. The value used is the property's value on 1 April 2022, or acquisition cost if bought later, with a general revaluation every five years. Unusually, ATED is paid at the start of the year it covers: the 2026/27 chargeable period runs from 1 April 2026 and the return and payment were due by 30 April 2026. That date has passed. If a property was in scope on 1 April 2026 and no return has gone in, file it now: late-filing penalties and interest run from the deadline, and the penalties apply even where a relief reduces the charge to nil. The next return and payment, for 2027/28, are due by 30 April 2027. A property acquired mid-year is reported within 30 days of acquisition, or 90 days if newly built, and part-year ownership reduces the charge on a daily basis.
Reliefs exist, but you must file to get them
Where the company genuinely runs the dwelling as a commercial business, most commonly a property rental business letting to unconnected third parties on arm's length terms, a relief usually removes the charge to nil. Other reliefs cover developers holding stock, property traders, farmhouses, employee accommodation and dwellings open to the public at least 28 days a year. None of it is automatic: you must file a Relief Declaration Return by 30 April within the chargeable year, and missing that filing brings penalties even where no tax is due. Occupation by a director, shareholder or family member, even briefly, can deny the relief for the whole period. If you are weighing up whether a company wrapper still makes sense for UK property held from abroad, Horizon models the whole position on fixed fees agreed upfront, and a free clarity call at /book is the place to start.