UK: UK Real Estate Investments – Non-Resident Companies Must Register With HMRC For Corporation Tax Under New Regime Applying From April 2019

Last Updated: 11 June 2019
Article by Terence Pay

From 6 April 2019, capital gains made by non-resident companies from disposals of all UK real estate (both residential and non-residential) are within the charge to UK Corporation Tax ("CT"). The same applies for certain "indirect" disposals of UK real estate, i.e. where a non-resident company disposes of an interest in another company that is UK "property rich."

From 6 April 2020, all income (e.g. rents) of non-resident companies from UK real estate investments will also be within the charge to CT.

As a result of these changes, non-resident companies will need to register with HMRC for CT within 3 months of the date of either of the above CT charges applying to them.

Moreover, from 6 April 2019, capital gains from the following have become taxable for all non-residents (i.e. both companies and natural persons) for the first time:

  1. Non-residential (i.e. commercial) UK property interests; and
  2. Shares of companies that are UK "property rich" (i.e. those that derive at least 75% of their value from UK real estate of any type) where the seller held at least 25% of the shares.

The remainder of this briefing gives further detail on compliance obligations for CT, the tax implications of the new charge to CT and how Verfides can help.

Registration, tax returns and payment of tax

The deadline to register with HMRC for CT is always 3 months from coming within the scope of charge.

All UK real estate sales (i.e. both non-residential/commercial and residential) are within the scope of charge to CT for non-resident companies from 6 April 2019. But rental income will only come within scope of the charge to CT for non-resident companies from 6 April 2020.

Therefore, a non-resident company not already registered for CT will now need to register within 3 months of the sale of any UK land or property. If the real estate in question had previously been rented out to a tenant then, for the 2019-20 tax year only, the non-resident company will be within a dual regime requiring it to file a CT return in respect of the sale (whether it results in a gain or loss) and a hardcopy income tax return to report the rental income up to the point of sale. In these cases, the CT return will cover an accounting period of one day only, i.e. the date of sale.

The normal CT filing and payment deadlines will generally apply, such that payment is generally due 9 months and 1 day following the end of the accounting period; with the CT return filing (counterintuitively) having a later deadline of 12 months following the end of the accounting period.

However, CT is required to be paid by instalments where profits exceed £1.5m. Non-resident companies generating a gain at this level will then have 3 months and 14 days to pay the total CT liability.

Non-resident companies already receiving UK rental income will have 3 months from 6 April 2020 to register for CT. Unless they later become dormant for CT purposes, they will then already be registered to report any sales occurring from this date. For payment of CT in this scenario the same principles as outlined above will apply.

Tax implications of the new CT regime

The tax implications resulting from the move to CT for non-resident companies include the following.

Lower rates of tax

CT is currently charged at 19% on both gains and income, but the rate is set to reduce to 17% from April 2020 (when rental profits will come into charge).

This compares very favourably with the 28% rate of ATED-CGT which applied to gains on residential property within the ATED regime. ATED-CGT is abolished with effect from 6 April 2019.

The 19% (or 17%) rate of CT also compares favourably with the 20% rate of NRCGT which previously applied to residential property investments not within ATED (i.e. by virtue of use in a property business).

Rebasing dates

For the purposes of computing gains on sale under CT, investments in commercial property and shares of property rich companies will be rebased to their market value at April 2019 (or the date of acquisition, if later). This is in order that tax is not charged on gains that accrued before the new regime began to apply.

Residential property investments will be rebased to market value at April 2015 (or the date of acquisition, if later), as was the case under the NRCGT regime previously applying.

Residential properties that were previously within ATED were rebased to market value at April 2017 for ATED-CGT, so the new rebasing under CT to market value at April 2015 could imply either a tax benefit or cost depending on value fluctuations between these dates (with any cost mitigated by the lower tax rate).

Indexation allowance

Gains charged to CT benefit from the indexation allowance, which provides a measure of relief in line with inflation. However, the allowance has been frozen from 31 December 2017, meaning the indexation allowance will only give relief for residential property gains during periods of ownership in the 21 months from April 2015.

Extended filing and payment deadlines

Whereas gains charged to NRCGT or ATED-CGT were required to be reported on a tax return within 28 days of sale (with the tax also to be paid in this timeframe in many cases), non-resident companies will now have the extended deadlines as outlined above.

How Verfides can help

We specialize in advising non-residents on UK taxation, including tax planning and mitigation opportunities, and UK real estate is naturally a key area of focus.

Overview commentary is included in this briefing, but we would encourage readers to get in touch with us for further advice tailored to their specific circumstances.

We can also handle all UK tax compliance obligations on your behalf, including registration for CT and preparation and filing of returns.

If Verfides already serves as tax agent of a non-resident company for income tax purposes then we will be able to arrange its registration for CT without the need for separate CT authorisation vis-à-vis HMRC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions