90: HMRC targets companies holding UK residential property

HMRC is sending letters to non-resident companies which it believes may hold UK residential property.

The letters are ostensibly about the annual tax on enveloped dwellings (ATED) and the non-resident landlord scheme, which can apply when properties are rented out. However, they also contain general questions on the property ownership and structure, including asking for several details in relation to any trust involved, some of which appear to be irrelevant to ATED and the non-resident landlord scheme.

Letters are also being sent to occupiers of such properties.

Ignoring the letters may lead to further questions or a formal enquiry. We recommend that recipients of such letters seek professional advice in how to respond.

We also recommend that owners of such companies who have not taken UK tax advice on them in the past year or two consider doing so now, even if they have not received one of these letters.  Tax relating to UK property has been changing rapidly, on an annual basis, in recent years.  Without advice, the owners of such properties, or companies holding them, risk incurring UK tax liabilities of which they were not aware.