Property holding structures—direct tax and stamp taxes treatment of a non-UK company
Produced in partnership with Charles Goddard of Rosetta Tax
Property holding structures—direct tax and stamp taxes treatment of a non-UK company

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

  • Property holding structures—direct tax and stamp taxes treatment of a non-UK company
  • Key tax advantages and disadvantages of a non-UK company
  • Stamp taxes
  • Anti-avoidance measures relating to dwellings owned by companies
  • Direct taxes
  • Direct taxes—non-UK company trading in and developing UK land or trading through a UK PE
  • Direct taxes—non-UK company trading otherwise than through a permanent establishment
  • Direct taxes—non-UK company holding property as an investment
  • Practicalities of maintaining non-UK tax residence

FORTHCOMING CHANGE relating to non-residents buying residential property and SDLT: Following an announcement at Budget 2018, the government has consulted on introducing an SDLT tax surcharge of 1% for non-residents buying residential property. The consultation is closed on 6 May 2019. For more detail, see News Analysis: Reforming SDLT—the government consults on a non-UK resident surcharge.

Owners of UK property may choose to hold their property through a company incorporated and resident for tax purposes outside the UK (referred to in this Practice Note as a non-UK company). There may be a number of non-tax reasons for this, including:

  1. commercial convenience

  2. regulatory reasons, or

  3. preventing information as to the ownership of property from becoming public

However, tax is often a contributing factor and non-UK companies used to be (prior to 6 April 2019) an effective vehicle, particularly for non-UK resident investors investing in non-residential property.

A key exception to this was in relation to residential property, where three key legislative changes made holding UK residential properties through offshore structures much less advantageous as compared with other structures.

The first of these was the introduction, with effect from April 2015, of a charge to capital gains tax (CGT) for all non-residents on disposals of UK residential properties. Only a gain accrued since 5 April 2015 was subject to the charge to CGT and reliefs generally