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You are hereHome / Corporation Tax for Non-Resident Companies

Vakis Kilikitas Senior Tax Adviser

17 Oct 2019

Non-resident companies disposing of UK Land or Property are now subject to UK Corporation Tax on realised gains. 

What’s changed?

Prior to 6 April 2019 non-resident companies disposing of UK residential property were liable to Capital Gains Tax through either the Annual Tax on Enveloped Dwellings or the Non-Resident Capital Gains Tax regime. From 6 April 2019 onwards those non-resident companies are now subject to Corporation Tax on any gain realised on the disposal of both residential and non-residential land or property. The current Corporation Tax Rate is 19% and is due to decrease to 17% on 1 April 2020. This represents a significantly lower tax rate than the 28% which was payable under the previous ATED and Non-Resident Capital Gains Tax regimes.

What is my chargeable gain?

In the case of residential properties which the company has held since 5 April 2015, the base cost of the property is rebased to the 5 April 2015 value, however, where rebasing is disadvantageous, for instance where the 5 April 2015 value is less than the actual acquisition cost an election may be made for this rebasing treatment not to apply.

In the case of non-residential properties, the chargeable gain is that which has accrued since 6 April 2019. The base cost for non-residential properties acquired before 6 April 2019 is rebased to the 5 April 2019 value, however, as is the case with residential property disposals an election may be made for this rebasing treatment not to apply.

How do I report my disposal?

Non-resident companies disposing of UK Land or property will need to register with HMRC for Corporation Tax within 3 months of the date of disposal in order to file a Corporation Tax Return and avoid any penalties for non-compliance. There are certain exemptions from the new regime and if you would like to find out more, please contact us on 020 7832 0444.