Share this content

Non-resident company

Tax of capital gain

Didn't find your answer?

Search AccountingWEB

If a Maltese company flips some commercial uk property, am I right in thinking that it has to register for UK CT for that gain?

Presumably it can also register for UK VAT & OTT on the property?

This is the only UK ‘trade’ of the company, and is probably (but not necessarily) a one-off. 



Please login or register to join the discussion.

16th May 2019 12:36

Article 5 of the 1994 DTA between Malta and the UK is in fairly conventional form. The existence of |UK situs property does not of itself constitute a permanent establishment of the Maltese company.

So the Maltese company is subject to UK tax on the transaction if under Article 4(3) it is "effectively managed" in the UK.

That assumes the Maltese incorporated company is subject to tax in Malta

The provisions of FA 2106 s76(2) remove the reference to a permanent establishment in CTA s5(2) as originally enacted. That however does not apparently override the treaty provision.

So the first question which must be answered is if Article 4(1) of the DTA applies to the Maltese company.

That reads:-
"(1) For the purposes of this Convention, the term "resident of a Contracting State" means
any person who, under the laws of that State, is liable to tax therein by reason of his
domicile, residence, place of management or any other criterion of a similar nature. But
this term does not include any person who is liable to tax in that State in respect only of
income or capital gains from sources therein."

This answer does not apply necessarily where , unlike in your question, residential property is in question

Thanks (1)
Share this content