HMRC writes to tenants of corporate non-resident landlords

From April 2020, non-resident companies with income from UK property will stop being charged UK income tax and will instead be subject to the UK’s corporation tax regime. HMRC is expected to publish further guidance in due course; in the meantime details of the policy change can be found in an HMRC policy paper.

The companies affected are likely to need to re-register with HMRC for corporation tax. Some, but not all, will already be known to HMRC through their registration under the non-resident landlord scheme.

It appears that HMRC is seeking to identify non-resident companies where they are not registered under the non-resident landlord scheme. The Tax Faculty has seen a copy of a letter which the HMRC wealthy and mid-sized business compliance unit is sending to the tenants of non-resident companies that are not registered under the non-resident landlord scheme. See below for a copy of the letter.

Unless the tenant is connected to the non-resident company named they are likely to be very confused by this lengthy letter and may not have access to a tax adviser. There is no requirement to operate the scheme where the landlord has registered for gross payment or the payment is made to a letting agent.

The Tax Faculty is seeking further clarification from HMRC.