chargeable gains on property held through offshore companies · 2020. 4. 27. · through offshore...
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Insights Property Chargeable gains on property held through offshore companies
The tax reporting requirements have changed in relation to disposals of UK investment land and property held through offshore companies.
Chargeable gains on property held through offshore companies Compliance Procedures between 6 April 2019 and 5 April 2020.
From 6 April 2019, offshore property disposals by companies are within the corporation tax regime. The rate of corporation tax is currently 19%, lower than the capital gains tax rates of 20% which previously applied.
Non-UK resident companies can no longer use the HM Revenue & Customs (HMRC) online facility to report relevant property disposals and must instead submit a Form CT600. These changes will therefore affect those seeking to ‘de-envelope’ property from companies.
From 6 April 2019, an offshore company which disposes of UK commercial or residential property which is held as an investment must:
■ Register for UK corporation tax;
■ File a corporation tax return online and make a payment on account; and
■ Deregister for corporation tax (if appropriate).
Companies are required to register for corporation tax within 3 months of the date of disposal. The date the tax becomes due depends on the size of the gain and length of the accounting period.
HMRC have clarified that in most cases companies will have an accounting period of one day (the disposal date). HMRC will therefore accept the due date will be three months and 14 days after the date of the disposal rather than an earlier date under the instalment payment rules.
Companies are required to register for corporation tax within three months of the date of disposal.
©October, 2019. Blick Rothenberg Limited. All rights reserved. While we have taken every care to ensure that the information in this publication is correct, it has been prepared for general information purposes only for clients and contacts of Blick Rothenberg and is not intended to amount to advice on which you should rely. Blick Rothenberg Audit LLP is authorised and regulated by the Financial Conduct Authority to carry on investment business and consumer credit related activity.
Chargeable gains on property held through offshore companies
Sean RandallPartner Property
+44 (0)20 7544 8719 [email protected]
Helena KanczulaDirector Corporate Tax
+44 (0)20 7544 8748 [email protected]
16 Great Queen StreetCovent GardenLondon WC2B 5AH
+44 (0)20 7486 0111 [email protected] blickrothenberg.com
How Blick Rothenberg can help
The Blick Rothenberg property team can advise you on the implications of the disposal of UK property or sale of companies whose value derives from UK land.
Our corporate tax team works with offshore companies and their advisors, to ensure that they are aware of their filing obligations in relation to property disposals. We can assist with registering companies for corporation tax with HMRC and the preparation and submission of tax returns for these purposes.
As there may also be other UK tax implications of transactions in land and property we can provide full advice covering matters such as stamp duty land tax and VAT.
These rules may also apply to indirect disposals e.g. the sale of shares in companies whose gross asset value is represented 75% or more by UK land.
From 6 April 2020, most offshore companies which hold UK property as a rental business will need to submit annual corporation tax returns to report their income as well as any future gains. A lower rate of corporation tax of 17% will be introduced from 1 April 2020.