If you’re a property owner in the UK or thinking of purchasing a property to hold it, this is the guide for you. The way you buy or hold property will affect its tax treatment. There have been some recent changes in the taxation of residential property in the UK.

All owners and buyers of residential properties need to reevaluate the most tax-efficient way of buying and holding UK property. In this guide, we’ll discuss handling property tax in the UK. To consult property tax advisors in London or Walsall, visit us at IBISS & CO.

Personal Owned Property

This is certainly the most common way people hold property in the UK. It’s also the most tax-efficient way, depending on what the owner’s circumstances are. If you’re earning income from a UK property, it will be subject to taxes if you’re a UK resident. If you are a resident of any other country, there may be double taxation.

All UK residents, for tax purposes, need to pay Capital Gains Tax (CGT) if they dispose of their UK properties. However, there are certain CGT reliefs that you can claim if the property you sold was your primary residence for the whole ownership period. In case of estate inheritance, this property will be liable for up to 40% inheritance tax (IHT) unless it’s a lifetime transfer.

If non-UK residents dispose of a property they own, they will liable for CGT unless they were living on the property for 90 days every year during the ownership period. Handling property tax in the UK becomes easier if you’re aware of these regulations.

Company Owner Property

Tax charges are now imposed on UK properties owned by companies. HMRC applies property tax charges on companies that own residential property in the UK, which is worth more than £500,000. However, certain tax reliefs are available where a company owns a property for rental, trading, or developmental business.

Income from properties a company owns is subject to tax in the UK. In case of disposal, there will be CGT applied too. However, companies won’t have to pay any corporation tax from the individual gains or income from the property. The corporation tax will be paid on income generated from the property.

For efficiently handling property tax in the UK, visit IBISS & CO. today. Our team of property tax advisors at our London and Walsall offices can help you minimise your tax liability. For property tax advice, reach out to us today.