Non-resident companies: UK property income


If the non-resident company owns land or property in the UK and enters into any transaction which produces rents or other receipts from land or property, it is treated as operating a property rental business in the UK.  The company is taxed on the profits of the business.

The profits are computed by taking the rents or receipts and deducting related expenses incurred in operating that business.  All activities by which the company derives income from land or property “in the same capacity” are treated as a single business.  It does not matter whether the company owns just one property or numerous properties.  Its all treated as a single business.  However if the company receives its income from land and property as part of a partnership, then the rental income from each partnership is treated as a separate property rental business.

There are complex rules regarding the manner in which various types of income must be treated and whether expenditure can be deducted against rentals or not and how tax relief for certain types of expenditure can be obtained.