The CIOT has published a discussion paper on whether a UK-resident individual shareholder of a non-UK resident company should declare, on their personal tax return, UK rental income received by the non-UK company. Although HMRC would expect that to be the correct position, reports the CIOT, the paper considers the case that the individual might not need to disclose the rental income at all in their return.
The key question here is whether the UK-resident shareholder of a non-UK resident company which is paying UK corporation tax on UK rental income should be subject to income tax on that same income by virtue of the transfer of assets abroad rules. The CIOT notes that HMRC guidance is not conclusive on this point. The question arises following the 2020 changes, where UK rental income of non-UK resident companies was brought within the charge to corporation tax rather than income tax.
The CIOT has approached HMRC for comment and to encourage ‘clear, decisive guidance’ to address the uncertainty.
The CIOT has published a discussion paper on whether a UK-resident individual shareholder of a non-UK resident company should declare, on their personal tax return, UK rental income received by the non-UK company. Although HMRC would expect that to be the correct position, reports the CIOT, the paper considers the case that the individual might not need to disclose the rental income at all in their return.
The key question here is whether the UK-resident shareholder of a non-UK resident company which is paying UK corporation tax on UK rental income should be subject to income tax on that same income by virtue of the transfer of assets abroad rules. The CIOT notes that HMRC guidance is not conclusive on this point. The question arises following the 2020 changes, where UK rental income of non-UK resident companies was brought within the charge to corporation tax rather than income tax.
The CIOT has approached HMRC for comment and to encourage ‘clear, decisive guidance’ to address the uncertainty.
