Non-resident landlords ― rules for companies from April 2020

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Corporation Tax

Guidance

Prior to 6 April 2020, all non-resident landlords (NRL) were subject to income tax on UK property rental income. Non-resident companies were subject to a flat rate of income tax (20%) on the rental income.

From 6 April 2020, non-UK resident companies are chargeable to corporation tax rather than to income tax on profits of a UK property business, ‘other UK property income’ and from 6 April 2019 on their corporate gains. There are transitional rules that apply for accounting periods that straddle this commencement date. These are discussed below. The position for NRLs who are not companies is unchanged.

NRLs are subject to the provisions of the non-resident landlords scheme (NRLS). The NRLS continues to apply to non-UK resident company landlords from 6 April 2020. Any income tax deducted under the NRLS can be offset against the corporation tax liability of the company in respect of that rental income. See the Non-resident landlords scheme (NRLS) guidance note for further details.

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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