Currently, non-resident companies are subject to income tax, at the basic rate, on their UK rental income. In March 2017, HMRC published a consultation looking at bringing such companies within the scope of corporation tax and non-resident CGT.
As well as the announcements in the Autumn Budget relating to the capital gains for UK property (see separate analysis), HMRC have confirmed that it is intended to bring the rental income from such non-resident companies within the scope of corporation tax, from April 2020. Further details regarding the mechanics of this change will be published shortly after the Budget.
This will affect all non-resident companies who own UK property from April 2020. It is also likely that, by falling within the scope of corporation tax, all of the provisions that apply to UK companies will also be applied to these companies – in particular the new complex corporate interest restrictions rules will need to be compiled with.