Corporation Tax

Direct disposals of interests in UK land by non-residents

Produced by Tolley
  • 03 Dec 2021 11:30

The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Direct disposals of interests in UK land by non-residents
  • Interests in UK land
  • UK residential property gains
  • Dwelling
  • Rate of tax applicable to the gain
  • Calculating the gain or loss on a direct disposal
  • Direct disposals not chargeable before 6 April 2019
  • Available methods to calculate the gain or loss
  • Direct disposals of pre-April 2015 assets fully chargeable before 6 April 2019
  • Available methods to calculate the gain or loss
  • More...

Direct disposals of interests in UK land by non-residents

Prior to 6 April 2019, only gains on direct disposals by non-resident persons of UK residential property interests were potentially subject to UK tax. This would have been the case where the capital disposal was annual tax on enveloped dwellings (ATED) related or was caught by the FA 2015 non-resident CGT (NRCGT) rules (referred to in this guidance note as the ‘NRCGT 2015 regime’). See the Overview of the ATED regime and Non-resident capital gains tax (NRCGT) on UK residential property (2015–2019 rules) guidance notes for further details on the operations of those rules. In both cases, the gains were subject to CGT, either at 20%, if caught by the NRCGT 2015 rules, or 28%, if ATED-related. The normal rule charging companies’ capital gains to corporation tax did not apply.

However, as a result of legislation introduced in FA 2019, Sch 1, all types of direct disposals of ‘interests in UK land’ (see below) by non-residents made on or after 6 April 2019 are within the scope of capital gains, widening the remit significantly (the extended regime is referred to in the remainder of this guidance note as the ‘NRCG 2019 regime’).

Essentially, from 6 April 2019:

  1. all direct disposals of interests in UK land, both residential and commercial, are subject UK tax. For non-resident companies, such disposals are subject to UK corporation tax rather than CGT

  2. the previous exemption from UK tax for residential property owned in diversely-held corporate vehicles (broadly, one

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

Think Tax.
Think Tolley.

Critical, comprehensive and up-to-date tax information

TAKE A FREE TRIAL

Popular Articles

What is input tax?

This guidance note provides an overview of what conditions need to be met before a business is entitled to treat VAT incurred as input tax. This note should be read in conjunction with the other notes in the ‘Claiming input tax’ subtopic. For a flowchart outlining the procedure for claiming input

19 Oct 2021 22:57 | Produced by Tolley Read more Read more

Self assessment ― amendments and corrections

Once a self assessment tax return has been filed, both HMRC and the taxpayer (or the agent) has the right to make changes to the return. There are different time limits depending on whether it is a correction by HMRC or an amendment made by the taxpayer.CorrectionHMRC has the right to amend the tax

19 Oct 2021 22:37 | Produced by Tolley Read more Read more

Qualifying year for state pension purposes

Why is this important?In order to get a full basic state pension, an individual must have paid sufficient national insurance contributions (NIC) for a minimum number of qualifying years in their working life. As NIC cannot be paid in the tax year before the individual reaches the age of 16, or in a

23 Nov 2021 16:11 | Produced by Tolley Read more Read more