1. UK Property: Impact of New
Tax Rules

2. UK Property: Impact of New Tax Rules
From April 2019 the UK will introduce new tax rules that will affect how UK property (both residential and commercial) and UK property holding structures are taxed. This presentation will give an overview of the changes and compliance issues and look at some examples of how this will impact on UK property holding structures.

6. UK Property – from 6 April 2019
Non-Resident Capital Gains Tax (“NRCGT”) extended
Commercial property
“indirect disposals”
Taxation of non-resident companies
Returns and payments

7. Inheritance Tax: residential property
OFFSHORE UK
Non-UK resident and domiciled
OFFSHORE TRUST
Res
£1m
Com
NON-UK Co
NON-UK Co
Res
£1m
Com
Res
£1m
Com

8. Non-Resident Capital Gains Tax (from 6 April 2019)
OFFSHORE UK
Non-UK resident and domiciled
OFFSHORE TRUST
Res
£1m
Com
NON-UK Co
NON-UK Co
Res
£1m
Com
Res
£1m
Com

9. Capital Gains Tax: UK commercial property
Non-UK Co
20%
NRCGT
19% CT
(17% in 2020)
OFFSHORE UK
Com
Com
Rebasing

10. Capital Gains Tax: indirect disposals
From 6 April 2019
Indirect disposals (e.g. selling shares)
Property rich vehicles (at least 75% property)
Holding requirement:
25%
2 year look back
includes connected parties
Trading exemption (e.g. pubs)

11. Non-Resident Capital Gains Tax (from 6 April 2019)
20%
NRCGT
Non-UK Co
OFFSHORE UK
Portfolio 25
Res
Com 10 65

12. NRCGT: Holding requirement
50% A
25% B
15% C
10% D
Non-UK Co
OFFSHORE UK
Com

13. Company Structure - rented
ATED
Exemption
Returns
Income Tax
Net rent
NRLS 20%
From April 2019
Corporation tax 19%
Loan relationships
Interest
Carried forward losses
Non-UK Co
OFFSHORE UK
RENTED

14. Company Structure - rented
Capital gains
Sell property: NRCGT 20%
Sell shares: 0%
From April 2019
Sell property: corporation tax 19%
Sell shares: NRCGT 28%
Rebasing
Inheritance Tax (“IHT”)
Before 6/4/2017
Now
Non-UK Co
OFFSHORE UK
RENTED

15. Company Structure – not rented
ATED
>£500k
Returns
Capital gains
Sell property: ATED-related CGT 28%
Sell shares: 0%
From April 2019
No ATED-related CGT
Property: Corporation Tax 19%
Shares: NRCGT 28%
Rebasing
IHT = same
Non-UK Co
OFFSHORE UK
NOT RENTED

16. Rental Business Now ATED Income Tax – 20% NRCGT – 20% Shares – no CGT
IHT
From 6 April 2019
Corporation Tax – 19%
Capital gains
Sale of property – corporation tax: 19%
Shares – NRCGT: 28%
Rebasing
Close company not relevant
25% holdings rule
Connected persons
2 year look back
IHT – no change
Hattie
Harry
Harvey
Henry X
10%
15% 2% 3%
30%
A-M
Jerseyco
40%
Rent
Rent
Rent

17. CGT : Returns and Payments on Account on disposal
Non-residents - 6 April 2019
UK residents - 6 April 2020
Obligation to make return:
NRCGT: 30 days
Corporation tax: tax return
AND payment on account
Problems:
estimates/error due to short time
losses

18. SDLT : Returns and Payments
30 days
From 1 March 2019: 14 days

19. SDLT: higher rates for additional residential properties
From 1 April 2016: extra 3% SDLT :
Up to £40k: 0%
0 to £125k: 3%
£125k to £250k: 5%
£250k to £925k: 8%
£925k to £1.5m 13%
Over £1.5m: 15%
Affects domestic and foreign purchasers
Companies also (but e.g. >£500k & not rented = 15%)

20. SDLT: non-residential
Freehold commercial property purchase
Up to £150k: 0%
£150k to £250k: 2%
Over £250k: 5%
Also SDLT on value of annual rent (1% £5m)

21. A Trust B B A A Trust B 20% Guarantee 80% BANK Loan due to Bank K Ltd
(BVI)
OFFSHORE UK C A
Security UK UK UK UK UK UK

22. *

23. Jonathan Colclough New Quadrant Partners Ltd 22 Chancery Lane London WC2A 1LS Tel: Fax: