BDO PRIVATE CLIENT SERVICES | ASIA ADVISORY SERVICES GROUP 09
RELEVANT UK TAXES IN RELATIONTOUK PROPERTY (i) Stamp Duty Land Tax (SDLT) In England and Northern Ireland, SDLT on the consideration for the purchase of a property is payable by the purchaser at up to 17%. A different regime apply in Wales and Scotland. (ii) Stamp duty Stamp duty is due at the rate of 0.5% on the purchase of shares in a UK company, or the purchase in the UK of shares in a foreign company. (iii) Annual Tax On Enveloped Dwellings (ATED) ATED is payable annually at up to £244,750 (for the year ended 31 March 2023) where a residential property is valued > £20m and owned by ‘non natural persons’ (e.g. a company). There are various reliefs and exemptions for certain types of businesses and properties. (iv) Income Tax (IT) UK resident individuals and non-UK resident individuals renting UK property are chargeable to UK income tax (up to 45%) on the UK rental profits.
(v) Capital Gains Tax (CGT) Both UK and non-UK resident individuals are chargeable to UK capital gains tax (up to 28%) on any chargeable gains arising from the disposal of UK property. Non-resident individuals can also be chargeable to CGT on gains realised on disposals of interests in
entities holding UK property. (iv) Inheritance tax (IHT)
UK property owned by individuals can give rise to an IHT charge (at up to 40%) on lifetime gifts and on death. The value of offshore companies (broadly those controlled by five or fewer shareholders) will fall within the UK estate of non-UK domiciled individuals (and subject to IHT) to the extent that the company derives its value
from UK residential property. (vii) Corporation tax (CT)
Capital gains and rental profits of companies are subject to CT at 19% (25% with effect from 1 April 2023, where profits are more than £250,000).
PROPERTY REGISTERS In March 2022, the UK Government enacted the Economic Crime (Transparency and Enforcement) Act 2022, which brings into law the creation of a public register of beneficial ownership information for overseas companies or other legal entities that own or buy UK property. The register will be maintained by Companies House and is publicly accessible. The Government still has to set the implementation date but it is expected to happen once Companies House and the Land Registry have set up the necessary systems to deliver the Act’s requirements. UK entities already have to disclose their beneficial ownership information under the people with significant control (PSC) register. While the tests are broadly the same, overseas entities will have to provide more information than UK entities do under the PSC register.
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