ATED was introduced to discourage holding UK homes inside corporate "envelopes" purely to save tax. The annual charge is tiered by the property's value at set valuation dates and is payable even if the property is empty. An ATED return is due by 30 April within the chargeable period.
Reliefs can reduce the charge to nil — most importantly where the property is let to third parties on a commercial basis, is held as trading stock by a property developer, or is open to the public. Each relief must be claimed on a Relief Declaration Return; it is not automatic.
Buyers acquiring through a company should price ATED into the annual holding cost alongside the 15% SDLT flat rate that can apply to corporate purchases of dwellings over £500,000. For many private buyers, personal ownership is cheaper once ATED and the SDLT surcharge are counted.