HMRC is launching a campaign aimed at foreign companies that may not have met their UK tax obligations on UK property they own.

The Chartered Institute of Taxation (CIOT) reports the initiative is being launched this month to tackle non-compliance linked to offshore corporates that own UK property.

It follows HMRC’s review of data from HM Land Registry and other sources that identified non-resident corporate owners of UK property that may not have met certain UK tax requirements.

‘Nudge’ letters for offshore companies

Depending on the circumstances, HMRC may issue one of two letters to the corporates, together with a ‘certificate of tax position’. Both letters also recommend the companies should ask connected UK-resident individuals to make sure their personal tax affairs are up to date in relation to anti-avoidance requirements.

The two planned letters:

  • One letter will be sent to non-resident companies that own UK property and may need to disclose income received as a non-resident corporate landlord or a liability to the Annual Tax on Enveloped Dwellings (ATED). The letter will also recommend anyone who may be within the Transfer of Assets Abroad (TOAA) legislation should get professional advice to ensure their taxes are up to date.
  • The other letter will be sent to non-resident companies that appear to have made a disposal of UK residential property between 6 April 2015 and 5 April 2019 without filing a non-resident capital gains tax (NRCGT) return. Again, the letter suggests anyone involved should seek professional advice.

We’ll let you know more details on the campaign when released.

Professional tax advice

Our team of UK tax consultants are experienced at working with offshore structures, non-domiciled individuals, and non-resident people and companies.

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Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation