Breakfast briefing: Non-resident investors in UK real estate

New legislation aims to level substantially the playing field in relation to the tax treatment of UK resident and non-resident investors in UK real estate. The changes will bring non-residents within the scope of UK tax on gains from direct, and certain indirect, disposals of UK real estate, with effect from April 2019. The UK Government has also confirmed that it plans to bring non-resident companies within the scope of corporation tax on their UK property-related income and gains with effect from April 2020.

These changes have the potential to impact significantly on the UK tax liability of non-residents holding real estate across the whole spectrum of structures through which UK real estate is currently held. Combined with proposals for a register of beneficial owners of overseas entities owning UK property, which is scheduled to go live by 2021, and an increased focus on off-shore substance, the landscape for overseas investors in UK real estate is changing.

In this briefing, partners Nick Cronkshaw, Matthew Hooton and Paula Macnamara:

• take some commonly used real estate holding structures and looked at how the upcoming changes are likely to affect them
• look at how structures may change moving forward
• identify considerations for real estate lenders, and
• highlight some practical steps that can be taken now ahead of the changes coming into effect.