The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
UK property is often held by non-resident persons indirectly, typically through the holding of shares in a company that in turn directly owns the property. For corporate groups, this form of ownership of UK property is very common, with property holding companies often established in such circumstances. Prior to 6 April 2019, these types of indirect disposals by non-residents were not commonly within the scope of UK corporation tax.
However, from 6 April 2019, disposals of shares (or similar interests) in ‘property rich’ companies are subject to tax. The legislation is drafted with reference to a right or interest in companies that are ‘property rich’, but also includes entities deemed to be companies, such as offshore collective investment vehicles who fall within the definition of company for these purposes.
The following two tests must be performed at the date of disposal to establish whether an indirect disposal is chargeable to tax:
is the disposal of a right or interest in a company that is ‘property rich’ (broadly, one where at least 75% of its gross asset value is from interests in UK land)?
does the non-resident person hold a ‘substantial indirect interest’ in the company either at the time of the disposal or at some point in the two years prior to that date (substantial being an interest of 25% or more)?
TCGA 1992, Sch 1A, Part 1, para 1; FA 2019, Sch 1, Part 1, para 14
If either the interest is in a company that is not ‘property rich’ or the interest is not ‘substantial’, any gain on the indirect disposal is not chargeable to UK tax.
There is also an exemption available in relation to disposals of property rich companies where the underlying property is used for the purposes of a qualifying trade (see ‘Trading exemption’ below).
This guidance note sets out the specific rules that apply to indirect disposals of interests in UK land made by non-residents on or after 6 April 2019 (referred to in
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
This guidance note explains the general rules surrounding the availability of indexation allowance on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to
The basic rule is that all benefits provided to an employee by reason of their employment are taxable unless there is a specific exemption or other rule that means they are not chargeable to tax.ExemptionsThe main exemptions for employee benefits are in ITEPA 2003, ss 227–326B (Pt 4).Below is an
Normal due dateSmall companies (including marginal relief companies) are required to pay all of their corporation tax ― nine months and one day ― after the end of the chargeable accounting period.For example, where a chargeable accounting period ends on 31 December 2018, the due and payable date for
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.