Non-Resident Landlords of UK Commercial Property
Written by Scott Jones, founder of CommercialPropertyKiln · Last updated
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Owning UK commercial property from overseas brings extra tax rules. If you, or an overseas company, own UK commercial property, these are the points that matter.
Tax on the rent
Overseas owners are taxable in the UK on rental profit from UK property. Since April 2020, non-resident companies pay UK corporation tax on their UK rental profits, rather than income tax, aligning them with UK companies. Non-resident individuals pay UK income tax on the rent.
The Non-Resident Landlord Scheme
Under the Non-Resident Landlord Scheme, a tenant or letting agent may be required to deduct basic-rate tax from rent paid to a landlord whose usual place of abode is outside the UK, and account for it to HMRC, unless the landlord has been approved to receive rent gross. Overseas landlords usually apply for gross payment approval and then report through self assessment or corporation tax.
Capital gains
Non-residents are within the scope of UK tax on gains from UK land and property, including commercial, and in some cases on indirect disposals of UK-property-rich entities. So selling UK commercial property from overseas is a UK taxable event.
Get cross-border advice
Non-resident ownership involves UK tax, the tax of your home country, double-tax treaties, and the reporting obligations of tenants and agents. Take advice from an adviser experienced in cross-border property, and see SPV vs personal on structuring.
How is an overseas owner of UK commercial property taxed?
Non-resident companies pay UK corporation tax on rental profit (since April 2020); non-resident individuals pay UK income tax. Gains on UK property are also within UK tax.
What is the Non-Resident Landlord Scheme?
Tenants or agents may deduct basic-rate tax from rent paid to an overseas landlord unless the landlord is approved to receive rent gross.