Non-resident landlord companies are being brought within the scope of UK corporation tax from 6 April 2020. This means that they will no longer be liable to income tax on their profits but will be liable to UK corporation tax instead.
|HMRC have started to issue letters to non-resident landlord companies stating the following:
And are requesting to be updated with the following information:
Troublingly, it would seem that HMRC think that most non-resident landlord companies have an accounting year end of 5 April. In our experience this is far from the truth. This is therefore something we are discussing with HMRC.
The letter asks for the company to write back with the information above. We suggest that those affected do not respond until we have clarity on a number of points which we hope to have very shortly.
In addition, HMRC have issued guidance on what the transition means for tax purposes looking at both the changes to what needs to be filed, when it needs to be filed, how and when the taxes need to be paid, as well as the effect the changes have on brought forward losses and capital allowances. Having reviewed the guidance, there are still a lot of open questions which we are addressing through our relationship with CIOT and HMRC – such as the year end point above – and we will be issuing a comprehensive note in due course.
However, some key points from this guidance are:
We will be issuing more detailed guidance on the transition shortly.
If you have any questions or concerns regarding this in the meantime, please get in touch with our tax team who will be able to assist you further.