Annual Tax on Enveloped Dwellings: reliefs and exemptions
Source: gov.uk (2025-05-02)

Find out what reliefs and exemptions are available for Annual Tax on Enveloped Dwellings (ATED).

Overview

There are reliefs and exemptions that may:
- mean you do not need to pay any Annual Tax on Enveloped Dwelling (ATED) (https://www.gov.uk/guidance/annual-tax-on-enveloped-dwellings-the-basics) 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 (https://www.gov.uk/government/publications/annual-tax-on-enveloped-dwellings-technical-guidance).

The Homes for Ukraine Sponsorship Scheme and ATED relief

From 1 April 2022 rules were put in place to make sure that some ATED reliefs would continue. These are available if a residential property is used to house people as part of the Homes for Ukraine Sponsorship Scheme.

The reliefs are:
- property rental
- property developers
- property traders
These reliefs will continue to be available where a residential property is occupied by individuals granted entry into the UK under the Homes for Ukraine Sponsorship 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 (https://www.gov.uk/government/publications/annual-tax-on-enveloped-dwellings-technical-guidance).

How to claim reliefs

Use the ATED online service (https://www.gov.uk/guidance/register-for-the-annual-tax-on-enveloped-dwellings-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 (https://www.tax.service.gov.uk/guidance/check-how-to-submit-your-ated-return/start/are-you-based-in-uk) 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 (https://www.gov.uk/government/publications/annual-tax-on-enveloped-dwellings-technical-guidance).