Finance bill 2018/19: Good news for overseas investors in UK Real Estate through offshore property unit trusts

It has been clear for some time that, from April 2019, non-UK residents would become subject to UK tax on gains when disposing of investments in UK commercial property or substantial interests in UK “property rich” vehicles. Whilst draft legislation has been produced and consulted on, a missing piece of the jigsaw has, until now, been details of how non-residents who invest through “collective investment vehicles” such as offshore property units trusts and other collective investment schemes (CIVs) would be taxed. Continue reading

Budget: Tax implications for real estate

Apart from a couple of pieces of good news, the Autumn Budget materials published earlier today contain a number of definite and potential changes to UK tax on real estate which could impact on pricing going forward.

The good news in the residential sector is undoubtedly the headline-grabbing reduction in SDLT for first-time buyers. The net effect of the proposal is that any first-time buyer will either have no SDLT to pay on purchases up to £300k, and less SDLT to pay on purchases up to £500k. This is worth up to £5k.

In the commercial sector, the good news is that the so-called ‘staircase tax’ is effectively being overridden by allowing businesses to ask the Valuation Office Agency to recalculate valuations by reinstating its previous practice in multi-occupancy buildings that applied for business rates purposes before the decision in Woolway (VO) v. Mazars (2015) UKSC 53. Also, no increases in SDLT rates were announced.

However, in the direct tax world, a number of changes are proposed (including changes that are the subject of a consultation announced today) that could have a significant impact, particularly as regards commercial property:

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