Finance Bill 2019 contains measures to move UK property income for non-resident companies from income tax to corporation tax and HMRC has published a policy paper, ‘Corporation Tax: UK property income of non-UK resident companies’.

The changes will apply from 6 April 2020:

  • Non-UK resident companies which carry on UK property businesses will be brought within the scope of Corporation Tax and moved out of the Income Tax regime.
  • Ordinary Corporation Tax principles will apply, i.e. interest will be dealt with under the Loan relationships rules.
  • The change from Income Tax to Corporation Tax will not be a disposal event for Capital Allowances.
  • Grandfathering provisions are included to enable Income Tax losses arising on the property business to be offset against future Corporation Tax profits of the UK property business. These losses cannot be offset against other income and cannot be group relieved.
  • Non-UK resident companies that dispose of UK property will move from CGT to Corporation Tax from 6 April 2019 under Extensions proposed for NRCGT.

These proposed changes follow a December 2017 consultation outcome.

The draft legislation and policy paper can be read in full here.


Offshore company holding UK residential property: tax issues

Non-resident companies chargeable to Income Tax and non-resident CGT: condoc outcome

Extending non-resident capital gains to commercial property

Non-resident CGT: UK residential property


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