Wealth advisers, asset managers and high net worth individuals from across the Channel Islands gathered this week to hear more about the impending changes to the way non-UK resident landlords will be taxed from April this year.
Private wealth and tax experts from Gateley, a legal and professional services group, held seminars in Jersey and Guernsey to provide information and advice on two major tax changes which will impact individuals and businesses who own commercial property in the UK but live overseas.
From 6 April 2020, non-resident property companies will be charged corporation tax, rather than income tax to align the treatment of resident and non-resident corporate landlords.
A senior associate within Gateley’s private wealth team, said: “On the face of it, the changes could appear as a good thing because corporation tax is currently at 19% which is below the 20% basic income tax rate currently levied against non-resident corporations, but this is only one aspect of the changes because the calculation of taxable profits is different under the corporation tax rules.
“The audience today were clued-up on a lot of the main issues, but they wanted to know more about the impact it will have on them.”
Steven Bone, a director of Gateley Capitus, a tax and capital allowances consultancy and part of the Gateley group, explained: “Previously, many offshore owners used interest on borrowings to wipe out profitability from rental income, therefore they had little need to mitigate tax, for example by claiming capital allowances. Under the new rules, many businesses will start paying tax for the first time.
“We have expertise in property valuation and tax and have a clear understanding of the legal basis for claims to ensure property owners can make their property investments as tax efficient as possible.
“We’re urging anyone who thinks they could be affected by the changes to speak to a capital allowances expert because there could be tax allowances that they’re missing out on.”