Priya Dutta answers a query on the corporate taxation of residential property.
Question
My client a non-resident company owns an apartment block overlooking the Thames. The building has been recently refurbished; increasing the market value to over £22m. The building consists of 11 units: nine apartments (each worth £2m) a penthouse (worth £4m) and a small caretaker’s flat (worth £0.5m). The company bought the property some time ago to redevelop with the intention of selling four of the apartments and letting out the rest at a commercial rent. One of the apartments is let to one of the shareholder’s brother. Another to his nephew. A commercial rate of rent is paid on both apartments. The same shareholder wants the penthouse to be made available to him and his family for periodic...
