HMRC launch new campaign - offshore corporates owning UK property

Annual Tax on Enveloped Dwellings (ATED)

All corporates that own UK residential property valued above £500,000 must file ATED returns and potentially pay an ATED charge each year.

Non-Resident Capital Gains Tax (NRCGT)

NRCGT was introduced to charge capital gains tax (CGT) on gains realised by non-UK resident corporates that disposed of UK residential property between 6 April 2015 and 5 April 2019. Since this date, disposals of UK property or land have been subject to UK Corporation Tax.

What’s happening?

HMRC has reviewed the data it holds, including from the Land Registry, to identify offshore corporates it believes have failed to file either ATED, NRCGT or non-resident landlord returns. The Directors of these companies will receive a ‘nudge’ letter that contains both a Certificate of Tax Position and a Notice of Intention to Disclose.

What should I do?

For those who receive a letter from HMRC, it’s important to note that there’s no statutory requirement to complete a Certificate of Tax Position or Intention to Disclose. 

However, these letters should not be ignored, as HMRC will likely open their own investigations, especially once they receive further information when the Register of Overseas Entities submissions are received. Therefore, it’s essential that appropriate specialist advice is taken on how to respond.

Beneficial owners, Shareholders and Directors of the corporates receiving these letters should also review their own tax position outside of those outlined above in relation to the property holding structure.

If any disclosure is required, it’s important that this process is managed carefully, and the letter is responded to within the 40-day deadline. By making a disclosure, you’ll have control over the process and will reach a settlement quicker than if HMRC were to open an investigation. This is because you determine the potential lost revenue, the behaviour that led to the non-compliance, and the level of tax-geared penalty.

How we can help

Our award-winning Tax Investigations and Dispute Resolution team can guide you through the disclosure process. Our disclosure experts have a proven track record of assisting clients with offshore non-compliance matters. We are able to:

• Conduct a review of your tax affairs to identify any issues that need to be disclosed.
• Register you for the appropriate HMRC disclosure facility. 
• Prepare and submit a disclosure that minimises your exposure to unnecessary tax, interest and penalties.
• If needed, negotiate a time to pay arrangement that is affordable according to your needs and personal circumstances.

Get help today

Call us today on +44 (0)20 7710 3389 or fill in the form below and a member of our team will be in touch. All communications are in the strictest confidence.