U.K. Property Tax Changes Affect Shipping Interests

Press Release
Thursday, March 07, 2013
Photo: Moore Stephens

International accountant and shipping consultant Moore Stephens said many overseas companies, including some connected to shipping interests, will be among those affected by draft legislation from the U.K. government proposing changes to the taxation of U.K. residential property valued at £2m or more. Among other things, companies resident outside the U.K. will, for the first time, be liable to capital gains tax (CGT) on such property, with effect from April 6, 2013.

The measures in the draft legislation include CGT at a fixed rate of 28% on  disposals of U.K. property owned by so-called ‘non-natural persons’ (NNPs), including those resident overseas, and an annual residential property tax (ARPT) on such properties where they are held by NNPs. Various entities are classed as NNPs, principally companies, but the definition does not include trusts. This means that a property owned directly by a trust will not be subject to the new charges.

These changes were  announced in the March 2012 U.K. Budget but, following lobbying, the government has allowed properties to be re-based to April 6, 2013, so that only gains from that date onwards will be caught  by the charge. Non-resident companies will be liable for CGT in respect of any chargeable gain accruing for a period where the property has been liable to ARPT. Previously, companies resident outside the UK were not liable to tax on gains unless they were trading in the U.K.

Gill Smith, a tax partner with Moore Stephens, said, “The government’s original proposals would potentially have taxed gains accruing since 1982 and involved the need to consider restructuring before April 2013. The rebasing to April 6, 2013 has bought a little time, but structures still need to be reviewed and valuations obtained.”

The ARPT will apply to ownership of interests in residential property valued at more than £2m.The charging structure falls into four bands, starting from an annual charge of £15,000 for properties valued between £2m and £5m, and rising to £140,000 for properties valued at more than £20m.Charges will be uprated annually in line with the Consumer Prices Index.

Gill Smith concluded, “The ARPT and CGT charges being introduced are significant. Structures need to be reviewed to see if restructuring can be undertaken to reduce liabilities.However, care is needed to ensure that other tax charges are not inadvertently triggered.”
 

Maritime Reporter March 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Petroecuador Tenders to Buy High Octane Naphtha

State-run Petroecuador has launched two tenders to buy a total of 22 cargoes, 240,000 barrels each, of high octane naphtha RON 87 and 93 for delivery starting on May 21-23,

DP World in Talks With Banks for $3b Loan

Dubai-owned port operator DP World is in talks with lenders to triple the size of an existing $1 billion loan, as well as extend the lifespan and reduce the interest rate,

Norway's Oil Sector May Face More Project Cuts, Delays

More oil and gas projects in Norway could be put on hold because of rising costs, adding to a growing list of developments that have been delayed or called off,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Standards Navigation Pipelines Pod Propulsion Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1724 sec (6 req/sec)