Guidance

Capital Gains Tax on high value residential property

If you pay Annual Tax on Enveloped Dwellings (ATED) when you sell the property you'll need to pay Capital Gains Tax.

Overview

ATED-related Capital Gains Tax (CGT) is payable mainly by companies that own UK residential property valued at more than £500,000.

You’ll need to complete an ATED-related CGT return if your property:

  • is a dwelling
  • is in the UK
  • was valued at more than:
    • £2 million (for returns from 6 April 2013 to 5 April 2015)
    • £1 million (for returns from 6 April 2015 to 5 April 2016)
    • £500,000 (for returns from 6 April 2016 to 5 April 2017 onwards)
  • is owned completely or partly by a:
    • company
    • partnership where any of the partners is a company
    • collective investment scheme - for example a unit trust or an open ended investment vehicle

Returns must be submitted by 31 January after the chargeable period.

You don’t pay ATED or ATED-related CGT if you own the property direct, rather than through a company.

If you’re a non-resident company find out more about CGT when selling (or disposing) of a UK residential property.

How much your company will pay depends on how long it has:

  • owned the property
  • been paying ATED on the property

You can find examples on how to calculate payment in the CGT manual.

The rest of the gain or loss may be chargeable to Corporation Tax or normal CGT.

You should tell HM Revenue and Customs if you have an ATED-related Capital Gain by completing the ATED-related Capital Gains Tax return form.

You’ll need to pay by 31 January following the end of the tax year.

Find out the ways to pay your ATED-related Capital Gains Tax.

Published 3 November 2014
Last updated 4 April 2018 + show all updates
  1. The page has been updated in line with the Annual Tax on Enveloped Dwellings guidance about property.
  2. The 'Overview' section has been updated.
  3. The tax threshold for Annual Tax on Enveloped Dwellings related Capital Gains Tax will reduce over 2 years from 6 April 2015.
  4. First published.