The Chancellor made various announcements on 27 October 2021 in his Budget impacting on the taxation of UK real estate.
The corporation tax rate is currently 19% and no further changes to the rate were announced today. However, it was previously announced on 3 March 2021 that the rate will increase from 1 April 2023 to 25% on profits over £250,000. The rate for small profits under £50,000 will remain at 19% and there will be relief for businesses with profits under £250,000 so that they pay less than the main rate. These upper and lower limits will be proportionately reduced for short accounting periods and where there are associated companies. Where the accounting period of the company does not end on 31 March 2023, taxable profits will be apportioned for the purposes of applying the increased rate.
Following changes introduced over the last five years, non-UK companies are now subject to UK corporation tax on their UK property business income, profits from a trade of dealing in or developing UK land (regardless of whether such activities are carried on through a permanent establishment in the UK), and capital gains on direct and certain indirect disposals of UK property.