ATED

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What is the annual tax on enveloped dwellings?

The annual tax on enveloped dwellings (ATED) was introduced as part of a package of measures aimed at making it less attractive to hold high-value UK residential property indirectly, eg through a company, in order to avoid or minimise taxes such as stamp duty land tax (SDLT) on a subsequent disposal of the property.

The other measures included in the anti-avoidance package relating to high-value UK residential property include:

  1. •

    the single higher rate of SDLT on the acquisition of high-value UK residential property for non-natural persons (NNPs) (for further details, see Practice Notes: Rates of SDLT and Single higher rate of SDLT for high-value residential property transactions), and

  2. •

    prior to 6 April 2019, a capital gains tax (CGT) charge on sales of high-value UK residential property by NNPs (abolished from 6 April 2019) (for further details, see Practice Note: Capital gains tax charge on ATED-related gains [Archived])

When does ATED apply?

The provisions enacting ATED are set out in Part 3 of the Finance Act 2013 (FA 2013). ATED

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