Overseas property businesses for companies

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Corporation Tax

Guidance

Overview

Real estate income is generally taxed where the property is located; the UK’s network of tax treaties generally allow the jurisdiction where the land is located to tax income from the land.

Therefore, a UK company with overseas property may be subject to tax in the foreign jurisdiction as well as in the UK, as UK tax rules subject a UK company to UK corporation tax on its worldwide profits including from foreign land and property. Relief for overseas tax on property income may be available by treaty relief, unilateral relief or deduction relief, depending on the circumstances.

There is unfortunately no substitute for checking the tax treaty to see if one country has unilateral taxing rights, or otherwise how its provisions may affect double tax relief. The relevant provisions to check will depend on the nature of the income, such as rental or trading.

Basis of taxation of foreign property income

Where the business of the UK company is such that the income

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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