Non-resident landlords

From 6 April 2020 non-resident corporate landlords will pay corporation tax on their UK property income profits instead of income tax. This change is creating a number of administrative bumps in the road.

Each of these non-resident landlords will need a new UTR number for corporation tax, if they don’t already have one. HMRC is now writing to those landlords with their newly allocated UTR number for CT, based on the information supplied in the 2017/18 non-resident income tax return submitted by the company.

If you receive such a letter we need to tell HMRC if any of the following applies:

• It already has a CT UTR number
• It no longer lets out UK property
• It already completes a different tax return, such as a SA700, which isn’t a non-resident income tax return

The accounting periods for these companies will be set-up to begin on 6 April, starting on 6 April 2020, and end on 5 April. If you prepare your accounts to a different date we need to tell HMRC in writing.

We also need to have to ensure you are registered on HMRC’s online services to be able to complete its CT return online. It will have to submit its accounts to HMRC with iXBRL tagging, just like any other company. The company may also need to register with Companies House if it has a permanent establishment in the UK.

The company may be making payments on account under the income tax system. These on account payments for 2020/21 need to be reviewed and reduced to nil if the company has no UK income other than from property. Income tax losses will be carried forward to set against future income profits from the same UK property business, but can’t be set against capital gains.

There are a number of other transitional rules for quarterly payments of corporation tax and losses.