A non-resident Company owns residential property in the UK. Section 11 ICTA 1988 advises that 'a non-resident company is only chargeable to corporation tax if it carries on a trade in the UK through a permanent establishment in the UK'
And goes on to say 'Chargeable gains arising on assets used for the purposes of a trade carried on through the permanent establishment ' are subject to tax'
In this case, assuming there has been no trade, i.e. the properties have merely been let, it appears that neither the lettings income, nor the gain arising will not be subject to UK Corporation Tax when the Company sells the property.
If the Company is under the control of a UK resident individual, who would of course, were it not for the existence of the company, have been taxable, will this still be the case? I am sure that there must be anti-avoidance legislation covering this but need a pointer in the right direction.
Any thoughts greatly received.
SP
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The company is not liable but ....
... assuming the company would be close if UK resident the members of the company who are resident in the UK will be liable to CGT on the gain - see s13 TCGA 1992
Nore carefully
As a non-resident landlord the company is liable to income tax on the UK source income which should have been levied by deduction at source by the payer of the rent, or the agent in the UK acting for the non-resident, unless the company brought itself within the self assessment net when the revenue can advise the tenant to pay gross. This is more of a problem for the tenant than the landlord of course.