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The migration of corporate non-resident landlords to corporation tax

Andy Tall – member of the Tax Faculty’s SME Business Tax Committee, the Enquiries and Appeals Committee and ICAEW’s Ethics Committee – takes a practical look at the preparations non-resident landlords and their agents need to make.

LandlordsNon-UK tax resident companies that own UK property have long been used to the non-resident landlord (NRL) regime. The profits of the rental business are subject to income tax at the basic rate. The tax is paid on 31 January in the tax year and 31 July following the tax year (50% of the prior year’s liability), with a final payment and the tax return due on the following 31 January.

This regime remains in place for rental income received in the tax year ended 5 April 2020 and earlier periods. Where a non-UK tax resident company receives UK rental income on or after 6 April 2020, the profits on this income will be subject to corporation tax and must be reported on a corporation tax return (CT600).