Non-resident landlords | Non-resident Company Landlords

Non-resident Company Landlords

The basics of the new rules from 5th April 2020.

Corporation Tax

From 5th April 2020 the income and gains of all non-resident companies has been subject to Corporation Tax. The Tax Return of the company will be the normal UK Corporation Tax Return and will be accompanied by its normal detailed annual accounts plus a conversion of those accounts into sterling (GBP) and a calculation showing the extraction of the UK taxable profit from the total figures shown.

The filing timetable and the return filing deadline and tax payment deadline follows normal UK company deadlines. The filing deadline for the Return will be one year after the end of the accounting period of the company and the deadline for payment of Corporation Tax is nine months after the end of the accounting period of the company.

Annual Tax on Enveloped Dwellings (ATED)

This is a tax or charge levied on residential property held by “non-natural persons” (including companies). It levied an annual charge at increasing rates on property worth more than £500,000. Properties are revalued every five years. The most recent valuation date is 5th April 2017 and ATED applies from 5th April 2018 to all properties worth more than £500,000 as at 5th April 2017. See Personal tax rates.

If a company lets the property that it owns you may claim relief from the charge. (There are a few other reliefs too.) But you have to claim the relief, it is not given automatically. This means completing an additional return each year, and having the property valued every fifth year.

See also Annual Tax on Enveloped Dwellings.

Stamp Duty Land Tax (SDLT)

Stamp Duty Land Tax is a tax on the purchase consideration and is paid by the purchaser. The 15% rate of Stamp Duty Land Tax was introduced at the same time as the Annual Tax on Enveloped Dwellings. This too has now been extended and so the 15% rate will also apply to company (and other non-natural person) purchases in the range of £1m to £2m from 6th April 2015 and purchases in the range of £500,000 to £1m from 6th April 2016. In addition, with effect from 1st April 2021, there is an additional surcharge of 2%. There are some exceptions.

Capital Gains Tax (CGT)

Non-resident companies pay Corporation Tax on chargeable gain arising on disposals. Where the property is a UK residential property, the gain accruing after 5th April 2015 to the date of sale is taxed. Where the property is a UK non-residential property or land the gain accruing after 5th April 2019 to the date of sale is taxed. Gains on disposals of UK property made by non-residents before April 2015/2019 remain generally outside the scope of UK taxation.

Get in touch to find out how we can help you with your with your non-resident landlord tax obligations

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