Capital Gains Tax treatment of UK residential property (May 2014)


Capital Gains Tax treatment of UK residential property (as of May 2014)

 

Form of ownership Tax at entity level Tax on individual if UK residentTax on non-resident individual
Direct ownership by individualN/ACGT on disposal of second home or rental propertyNo UK CGT
TrustUK trustees pay CGT at 28% on disposal of beneficiary’s second home or rental property Anti-avoidance rules charge UK resident domiciled settlors to CGT on disposals by offshore settlor interested trusts of beneficiary’s second home or rental property & in other cases UK resident beneficiaries on capital paymentsNo UK CGT
CompanyUK company – corporation tax; Foreign co – no CGT.  Both subject to ATED-related CGT on £2m+ residential propertyCGT on disposal of shares. Anti-avoidance rules attribute gains of offshore companies to UK resident participatorsNo UK CGT, although for non-resident landlords there is income tax on rental income
UK collective investment schemeNo corporation tax on gains, except for non-exempt unauthorised unit trusts and qualified investment schemes that fail GDO testCorporation tax or CGT on disposal of units (or on disposal of property if CIS is a partnership)No UK CGT
Offshore collective investment schemeNo corporation tax or CGT (except ATED-related CGT on £2m+ residential property)Corporation tax or CGT on disposal of units in a fund (or on disposal of property if CIS is a partnership)No UK CGT
REITNo corporation tax or CGT on disposal of UK property used in the property rental business (both UK & foreign REITs)Shareholders in a REIT pay corporation tax or CGT on disposal of shares rather than propertyNo UK CGT, although there is a withholding tax as for rental income if capital gains are distributed

 

 


RKG Consulting provides tax, immigration and accounting solutions. Our principal adviser is a "Chartered Tax Adviser" and is also an OISC-licensed immigration practitioner. We can provide a seamless service incorporating both tax and immigration solutions. If you have any queries, please feel free to contact us by telephone: +44 77 66 828 851
Contact us by email: rganguly@rkgconsulting.com or use the form below.

Contact Us