Claiming relief under a double tax treaty in relation to income or gains from UK real estate
Produced in partnership with Charles Goddard of Rosetta Tax
Claiming relief under a double tax treaty in relation to income or gains from UK real estate

The following Tax guidance note Produced in partnership with Charles Goddard of Rosetta Tax provides comprehensive and up to date legal information covering:

  • Claiming relief under a double tax treaty in relation to income or gains from UK real estate
  • Relevant treaty provisions
  • Residence
  • Permanent establishment
  • Income from immovable property in the UK
  • Property income distributions paid by a REIT
  • CGT on gains arising from UK real estate
  • CGT on gains arising from indirect disposals of UK real estate
  • Claiming double tax relief

Many investors in UK property are based outside the UK. The UK real estate sector is attractive to a range of investors, from high net worth individuals acquiring high-end residential properties to international funds investing in London office space or out-of-town shopping centres around the UK.

In general, any such investor will wish to structure their investment so that:

  1. so far as possible, they avoid coming within the charge to UK tax, namely:

    1. for companies—corporation tax on trading income and chargeable gains

    2. for individuals and trusts—income tax on trading income, CGT and inheritance tax, and

  2. to the extent UK tax arises, they are entitled to double tax relief

Investors will therefore often look to make any investment from outside the UK and, where relevant, to seek relief under double tax treaties entered into between the UK and their home jurisdiction.

The terms of double tax treaties entered into between the UK and other jurisdictions are given effect under UK domestic law by s 2 of Taxation (International and Other Provisions) Act 2010 (TIOPA 2010) (and more generally part 2).

This Practice Note looks at the requirements for claiming relief under a typical double tax treaty in relation to income from, and gains on the sale of, a UK property.

For the purposes of this Practice Note, it is assumed that the typical double tax treaty