This Content Was Last Updated on February 9, 2017 by Jessica Garbett


Residential properties owned by a company (or other collective investment vehicle) are described as being ‘enveloped’. This is because the ownership sits within a corporate vehicle which acts as a ‘wrapper’ or ‘envelope’.

Annual Tax on Enveloped Dwellings (ATED) is a tax charged on a company, a partnership with a company member, or a collective investment scheme which holds an interest in one or more UK residential dwelling(s). It applies when the single dwelling interest is worth more than £2m. The first chargeable period is 1 April 2013 to 31 March 2014.

The technical guidance for ATED has now been issued and includes special rules concerning the filing of returns for the chargeable period. The technical guidance also includes questions that aim to assist in determining whether a liability to ATED exists. The guidance states that for a liability to pay ATED to arise a potential taxpayer will need to answer ‘yes’ to all of the following:

  • do you meet the ownership condition?
  • are you beneficially entitled, either alone or with others, to a single-dwelling interest?
  • does that single dwelling interest have a value greater than £2m on the latest valuation date?
  • do none of the exemptions apply to you?
  • are you unable to claim a relief?

The guidance provides references for each of the questions to help determine the answer.

Article contributed by ACCA