Holding UK commercial property

The Government first announced its proposal to introduce a Public Register of Beneficial Ownership of UK Property in 2016. Following an initial consultation in 2016 and a further call for evidence in 2017, the Government has now published its plans to implement the register in the light of the responses to the call for evidence.

Country by Country reporting (‘CbCR’) is part of the OECD's approach to transfer pricing documentation and requires the production of a country by country report containing high level data on the global allocation of the Multi-National Enterprise's ('MNE's') income and taxes, and certain other measure of economic activity.

There were a number of changes announced today, the most significant of which apply to non-residents investing in UK real estate. In light of the proposal to bring all income and gains of non-residents in relation to UK property within the charge to UK corporation tax, the other proposals relating to UK corporation tax will affect UK and non-UK companies alike in the future.

The June general election meant that a number of key tax measures were removed from the first 2017 Finance Bill. Finance (No. 2) Bill, published today, re-introduced these, including the reform of corporate tax loss relief restrictions on the corporate interest deductibility, changes to the Substantial Shareholdings Exemption (“SSE” and bringing UK residential property within the scope of UK IHT for non-domiciliaries.

With the Government exploring ways to free up space and encourage the building of new homes, the Chancellor may consider a number of measures.

The Communities and Local Government Select Committee have been looking in to land value capture, having noted 'the re-emerging political interest in land value capture'.

In last year’s Budget we saw significant announcements in relation to bringing non-residents in the charge to UK tax on all direct and certain indirect disposals of UK real estate from April 2019, and non-resident companies within the charge to UK corporation tax on property income from April 2020. In addition to some further developments in those areas, following consultation, there were a number of other new developments impacting on real estate, in particular in relation to capital allowances.

Today the government published Finance Bill 2018-19. The following summary focuses on the proposed changes from April 2019 to the taxation of non-residents UK property gains, with particular focus on the detailed provisions in relation to Collective Investment Vehicles. These include various exemptions/reliefs in response to concerns raised during the consultation process.

In the 2017 Autumn Budget, the government announced that from April 2019 UK tax will be charged on capital gains made by non-residents on direct and certain indirect disposals of all types of UK immovable property, extending existing rules that apply only to residential property.

New rules take effect from 6 April 2019 extending the scope of UK tax on gains.

These changes also give rise to new notification/filing obligations.

Budget 2020 - Real Estate Tax