In another proposed change, from April 2020 non-resident companies investing in UK property will become subject to corporation tax on their profits rather than income tax as at present. This means that any avoidance provisions such as Corporate Interest Restrictions will apply.
The proposed changes are quite wide ranging and could have a major impact on non-residents with UK property interests non-resident landlords should consider the potential impact of the changes and whether any action is required.
Whilst this will increase tax costs for non-resident landlords which may discourage investment into UK property, in principle it seems reasonable that UK and non UK investors are taxed on a similar basis. It is however unfortunate that many changes impacting non UK investors have been introduced in a piecemeal way over a number of years rather than as one set of cohesive changes.
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