Annual Tax on Enveloped Dwellings: reliefs and exemptions

Overview

There are reliefs and exemptions that may:

• mean you do not need to pay any Annual Tax on Enveloped Dwelling (ATED) on your property
• reduce the amount of ATED you need to pay

Reliefs you can claim

You may be able to claim relief for your property, if it is:

• let to a third party on a commercial basis and is not, at any time, occupied (or available for occupation) by anyone connected with the owner
• open to the public for at least 28 days a year
• being developed for resale by a property developer
• owned by a property trader as the stock of the business for the sole purpose of resale
• repossessed by a financial institution as a result of its business of lending money
• acquired under a regulated home reversion plan
• being used by a trading business to provide living accommodation to certain qualifying employees
• a farmhouse occupied by a farm worker or a former long-serving farm worker
• owned by a registered provider of social housing or a qualifying housing co-operative

Find more information about these reliefs and the conditions you need to meet in sections 30 to 41 of the ATED technical guidance.

The Homes for Ukraine sponsorshipSponsorship schemeScheme and ATED relief

SomeFrom reliefs1 fromApril 2022 rules were put in place to make sure that some ATED mayreliefs bewould lostcontinue. These are available if a residential property is used to house people as part of the Homes for Ukraine sponsorshipSponsorship scheme.Scheme.

ThoseThe reliefs are for:are:

• property rental businesses
• property developers
• property traders

These reliefs will continue to be available whilewhere a residential property is beingoccupied usedby asindividuals partgranted ofentry into the UK under the Homes for Ukraine sponsorshipSponsorship scheme.Scheme. This also includes where individuals later transfer to the Ukraine Permission Extension Scheme.

Find full details in section 41A of the ATED technical guidance.

How to claim reliefs

Use the ATED online service to claim reliefs.

Relief Declaration Returns

If your relief claim reduces your ATED charge to nil, you need to use the ATED online service to submit a Relief Declaration Return.

Use the Check how to submit your ATED return tool for help with:

• how and when to submit your relief return
• issues using the ATED online service

Exemptions

If you meet the conditions for an exemption, you do not need to file a return.

There are a number of exemptions from ATED, including:

• charitable companies using the dwelling for charitable purposes — they must meet all of the exemption conditions in section 42 of the ATED technical guidance
• public bodies listed in section 43 of the ATED technical guidance
• bodies established for national purposes listed in section 44 of the ATED technical guidance

For more information on these exemptions, read the ATED technical guidance.