Direct tax treatment of owning UK commercial property—table
Direct tax treatment of owning UK commercial property—table

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Direct tax treatment of owning UK commercial property—table
  • Categories of property owner
  • Table of direct tax treatment of companies and individuals owning UK commercial property

This Table provides an overview of the direct tax treatment (ie corporation tax, income tax or capital gains tax treatment) of owning freehold or leasehold commercial property in the UK. Specifically, it sets out how UK tax resident, and overseas resident, companies and individuals that directly hold UK property are taxed in relation to rental income and sale proceeds depending upon whether they hold such property as an investment or for trading purposes.

The table assumes that the UK property in question is commercial rather than residential property. More specifically, it assumes that the property does not comprise (or include) a single dwelling worth more than £500,000 and does not fall within the scope of the annual tax on enveloped dwellings (ATED). For more details on ATED, and the rules that subject both UK and non-UK resident companies to UK capital gains tax on the disposal of such a dwelling prior to 6 April 2019 held as an investment, see Practice Notes: Property holding structures—direct tax treatment of UK company, Property holding structures—direct tax and stamp taxes treatment of a non-UK company and ATED—the basics.

The tax treatment of other property owners (such as partnerships or unit trusts), and the indirect tax treatment (VAT and SDLT) of property ownership, are outside the scope of this Table.

The tax treatment of UK tax