Non-UK companies with UK rental profits are subject to corporation tax from 6 April 2020… Don’t get caught out
There has been a special regime for all non-UK resident holders of UK property who let their properties. This is called the Non-Resident Landlord (“NRL”) scheme.
The regime applied to individuals, trusts and companies resident outside of the UK for tax purposes.
With effect from 6 April 2020, non-UK resident companies with a UK property rental business or with other UK property income will be liable to corporation tax at 19% from April 2020 rather than income tax at the basic rate of 20%.
Such landlords will need to get to grips with a new reporting regime. Rather than completing the NRL income tax return they will now have to familiarise themselves with completing a corporation tax return.
Unused income tax losses should be carried forward into the new corporation tax regime.
Larger entities may be affected by rules that apply to restrict the use of losses brought forward and cap the deduction of interest expense.