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ATED ― background

The annual tax on enveloped dwellings (ATED) regime was introduced by FA 2013, Part 3 and was one element of a series of anti-avoidance measures that were designed to make it less attractive to hold high-value UK residential property through a corporate structure (or ‘envelope’).

The key aspects of ATED are:

1. •

   the annual charge

2. •

   entities ‘in charge’ but relievable and the nil return requirement to avoid penalties

3. •

   ATED-related SDLT

4. •

   ATED-related CGT for disposals prior to 6 April 2019

The ATED regime applies to high-value UK residential property owned on, or acquired after, 1 April 2013, by:

1. •

   companies

2. •

   partnerships with at least one company member, or

3. •

   collective investment schemes (including unit trusts)

Together these are referred to in the remainder of this guidance note as ‘non-natural persons’ or ‘NNPs’. The ATED charge applies regardless of where the NNP is established or resident and therefore applies to both UK and non-UK NNPs.

Those within the ATED rules are