Autumn Budget 2017—Real estate taxes

Autumn Budget 2017—Real estate taxes

This analysis is part of the Lexis®PSL Tax team’s summary of the Autumn Budget 2017.  Some of the links require a LexisPSL subscription. If you are not a subscriber, you can take a free trial here.

Corporation tax on non-UK resident companies’ UK property income and gains

Following an announcement at Autumn Statement 2016 and a consultation at Spring Budget 2017, the government has confirmed that it intends to introduce corporation tax on non-UK resident companies’ UK property income and on their gains from disposals of UK residential property, replacing the current income tax and CGT charges. The changes will take effect from April 2020. The government plans to publish draft legislation for consultation in summer 2018, and given the proposed implementation date, the final legislation may be intended for Finance Act 2020.

This measure follows the introduction in 2016 of a corporation tax charge on companies that deal in or develop UK land (see Practice Note: Profits from trading in and developing UK land (transactions in UK land)). It is a further erosion of the principle that non-UK resident companies do not pay corporation tax unless they trade in the UK though a UK permanent establishment (see Practice Note: When does the UK tax non-resident companies?).

For background information on the previous consultation, see News Analysis: Bringing non-resident companies with income and gains from UK property into the corporation tax net.

See: Autumn Budget 2017 (para 3.32) and OOTLAR (para 2.32 in the pdf version).

Taxing gains made by non-residents on immovable property

Legislation will be included in FB 2019 taxing gains made by non-residents on immovable property from April 2019. This measure will extend existing rules that apply only to residential property: CGT on ATED–related gains and Non-resident CGT (NRCGT) (see Practice Notes: Capital gains tax charge on ATED-related gains and Non-resident CGT—summary).

The new rules will create a single regime for disposals of interests

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