ATED is a tax on UK enveloped dwellings, which includes residential property and any building that is capable of being used as a dwelling. Enveloped means that the dwellings are owned, or partly owned, by a company, a partnership with a corporate member or a unit trust. These ownership structures could be UK or non-UK situated.

ATED has applied from the tax year 2013/14 onwards based upon the property value on 1 April 2012 and was phased in for properties valued over £2m initially, and then widened to properties over £1m from 2015/16 and over £500,000 from 2016/17.

This reduction in value to £500,000 has meant that many buy-to-let landlords who were not impacted by the regime at its inception now need to ensure they are compliant in order to avoid an unexpected tax charge and penalties.