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If you own a non-resident landlord (NRL) company with property in the UK, you will need to be aware of new tax changes coming in April 2020.

From 6 April 2020, any non-resident landlord (NRL) company with a UK property business will pay Corporation Tax instead of Income Tax on any UK profits made. The 2019/20 tax year will be the last year which the form SA700 will be accepted to file a tax return for a non-resident company. For accounting periods starting 6 April 2020 onwards any non-resident landlord will need to file the Corporation Tax return form CT600 instead.

You should be sent a Company Unique Taxpayer Reference (UTR) before April 2020 and HMRC will automatically register the company for Corporation Tax. If you do not recieve a UTR by 30 June 2020 then you should contact HMRC.

Any UK rental profits will need to be calculated using the Corporation Tax rules and transitional rules.

What do you need to do?

In order to prepare and file the Company Tax Return online, the company will need to find suitable software and register with HMRC online. You will be unable to use HMRC’s free filing service to file the tax return.

You need to evaluate your property portfolio and carefully plan any future acquisitions to ensure that available exemptions are utilised and your tax position is optimised. Our Tax and Wealth Planning team have significant expertise in helping landlords with tax planning.

Where you reside and your domicile can dictate the tax regime under which you fall. Specifically, where you reside and your domicile will impact whether you pay any UK tax on your overseas income, gains and estate on death. You should evaluate where you reside and domicile to optimise your tax position.

Contact Ann Bibby on abibby@ellacotts.co.uk or 01295 250401 or fill out our contact form for more information and help on property tax in the UK.

Find more information about taxation relating to property renting in the UK, on the HMRC website.