Changes to Investment Property Taxation


The recent changes to the taxation of UK investment property, announced by HMRC, were introduced to ensure that non-residents are liable to UK taxation on gains made from selling UK properties, like that of UK residents.

We have been covering the topic in previous blog posts which can be found here:

To briefly summarise, as of the 6th of April 2013, high-value UK residential property owned by a company has been subject to an annual tax on enveloped dwellings (ATED). The level of the annual ATED charge is based on the market value of the UK residential property. In addition, ATED CGT at 28% is charged on the gains from the sale of ATED UK property.

As of the 6th of April 2015, most non-UK residents have also been liable to UK Capital Gains Tax (CGT) for disposals of UK residential property. From the 6th of April 2019, any UK commercial investment properties owned by non-residents were added to the charge to CGT and the above-mentioned 28% ATED, and the CGT charge was abolished. Companies selling UK investment property at a gain are now only liable to Corporation Tax at the current rate of 19%; giving companies that were previously within ATED CGT a 9% tax cut.

Changes have also been made towards the timing, filing and paying CGT to HMRC for UK property. Currently, CGT rules for non-residents owning UK property are to be implemented from the 6th of April 2020. HMRC has stated that this is to ‘level the playing field’ between resident and non-resident UK taxpayers and to ‘simplify’ the CGT on UK property.

We do not view the new CGT rules as being simple, and if you are to sell a UK property after the 6th of April 2020 that gives rise to taxable gain, it is advisable that you seek professional financial advice. Particularly if you own a UK property with mixed usage, i.e. both residential and commercial.

HaesCooper can provide you with bespoke CGT advice on the sale of your UK property. As of the 6th of April 2020, the date for the CGT return and payment to HMRC for UK residents selling a UK property giving rise to a taxable gain has been brought forward within 30 days of the sale completion date. 

The CGT return, and the CGT payment can only be based on estimates, as matters such as the offset of CGT capital losses and for individuals, their exact CGT rate(s) (companies will pay their CGT at the known Corporation Tax rate) will not be known until after the end of the relevant tax year.

The CGT payable within 30 days of the property’s sale completion date will be based on a ‘notional chargeable gain’, and the CGT paid to HMRC will be a ‘payment on account’ with the final CGT Return. The CGT payment will be calculated under the normal annual Self-Assessment Return rules and timetable.

Please contact us for professional advice regarding this matter or if you would like to discuss anything mentioned in this blog post – or anything related to tax accountancy. Our expert team is on hand to provide advice or guidance to businesses of all sizes.

Alternatively, browse our resource centre for more articles and guides related to capital gains tax and other industry changes.

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