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 September 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds


Demands for Icebreaker Tours Spiral

Plans to terminate commercial tours to the North Pole on the nuclear-powered icebreakers of the Atomflot company in 2016 have surged the demand for these tours.

MARAD Funds Study on LNG As Propulsion Fuel

The Maritime Administration (MARAD) has announced a $900,000 cooperative agreement with Totem Ocean Trailer Express Inc. (TOTE) to further develop knowledge

Teekay LNG Partners Declare Distribution

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. has declared a cash distribution of $0.70 per unit for the quarter ended September 30, 2015. The

Maritime Careers / Shipboard Positions Maritime Security Navigation Offshore Oil Pod Propulsion Salvage Ship Electronics Ship Repair Ship Simulators Sonar
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: 0.1233 sec (8 req/sec)