UK and International Tax news

HMRC Issues Guidance For Non Resident Corporate Landlords

Wednesday 22nd January 2020

HMRC has issued guidance for non-resident corporate landlords in relation to the requirement to start paying corporation tax rather than income tax on their profits from 6 April 2020.

HMRC will be automatically registering non-resident landlords for corporation tax and issuing corporation tax unique taxpayer references. Companies should contact HMRC if they have not received a UTR by 30 June 2020 or if they already have a corporation tax UTR.

Companies wishing to retain the services of an existing agent for corporation tax will need to authorise that agent to act for them in respect of corporation tax.

Companies will need to register with HMRC online services to file their corporation tax return online. They may also need to register with Companies House if they have a permanent establishment in the UK.

Transitional rules will apply in respect of pre 6 April 2020 income tax losses which may be carried forward for corporation tax purposes and be relievable against future profits from the same property or non trade loan relationships profits relating to the UK property business. Carried forward losses will not be relievable against future capital gains.

Capital allowances written down value pools will be carried forward from 5 April 2020 and no balancing allowances or charges will arise.

Relief for finance expenses are treated differently for corporation tax and the corporate interest restriction may need to be considered.

Accounting periods will be set up to default to end on 5 April but if the company prepares its accounts to a different date, it must inform HMRC in writing in order to continue to use its usual accounting reference date.

HMRC’s guidance also makes reference to the different tax payment rules and dates for companies, company tax return submission requirements, and transitional rules in respect of quarterly instalment payments for very large companies.

If you would like more details on the above, please contact Keith Rushen on 0207 486 2378.

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