Non-residents to pay tax on sales of all UK property

The Treasury has published a consultation document on taxing gains made by non-residents on disposals of all types of UK immovable property. It proposes to extend the current rules that apply only to residential property.

The plans change both the capital gains tax and corporation tax regimes significantly. With some exceptions the intention is that the usual rules will be followed for the assets brought into scope.

There will be a single regime for disposals of interests in both residential and non-residential property. A new charge will be introduced for gains on disposals of commercial property and those for residential property will be extended to indirect sales and disposals made by widely held companies.

Indirect disposal rules will apply when an entity is ‘property rich’ – broadly when 75% or more of its gross asset value at disposal is represented by UK immovable property. These will trigger the charge...