Unlocking tax on rental income

Caroline McCabe considers the impact of bringing non-resident companies into the charge to corporation tax on UK property rental income from 6 April 2020

The past few years have seen significant changes to the way non-resident investors in UK properties are taxed, starting with narrowly targeted provisions such as the annual tax on enveloped dwellings (ATED) in April 2013 and the introduction of a non-resident capital gains tax (NRCGT) on disposals of UK residential property in April 2015. NRCGT was replaced in April 2019, widening the scope to include disposals of UK commercial property and ‘indirect disposals’ of UK property (broadly, where interests of at least 25% in entities deriving at least 75% of their value from UK property are disposed of). The 2019 changes were fundamental and have taken up substantial amounts of advisors’ time.