ENGLISH REAL ESTATE TAXATION 1. Acquisition of the

ENGLISH REAL ESTATE TAXATION 1. Acquisition of the

 18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
www.finimmo.com
ENGLISH REAL ESTATE TAXATION 1. Acquisition of the real estate investment Selling of a real estate property under VAT regime The seller can opt to charge VAT in case of sale of a land. The first sale of a newly constructed residential building will be zero rated for VAT purposes. The VAT standard rate is 20%. Transfer tax and others acquisition costs The rate of the transfer tax of a residential property varies according to the amount of the transaction: -­‐ 5% if the consideration is between GBP 1 million and GBP 2 million; -­‐ 7% if the consideration is more than GBP 2 million; -­‐ 15% if the consideration is more than GBP 2 million and the purchaser is a “non-­‐natural person”. The acquisition of shares of a real estate oriented company is not subject to stamp duty land tax but to stamp duty at the rate of 0.5%. 2. Holding the real estate investment An annual charge applies from April 2013 with the following scale (except if the owner is a trustee): Property value Annual charge GBP 2 million to GBP 5 million GBP 15,000 GBP 5 million to GBP 10 million GBP 35,000 GBP 10 million to GBP 20 million GBP 70,000 Above GBP 20 million GBP 140,000 The UK law does not specify any debt-­‐equity or other guidelines that must be adhered to. The UK corporation tax is established at a rate of 23% on its profit from the exploitation of land in the UK. A non resident is assessed to UK income tax at a rate of 20% on rent from the letting of land in the UK. No depreciation is available for land and buildings. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
www.finimmo.com
3. Selling the real estate investment Sale of a real estate property A UK resident company is subject to UK corporate tax on gain arising from a disposal of real estate at the rate of 23%. A capital gains tax charge at a rate of 28% on gains realized on the disposal of UK residential properties for more than GBP2 million by non-­‐UK resident non-­‐natural owners. Sale of a real estate oriented company A UK resident company is normally subject to corporation tax on gain arising from a sale of shares of a real estate company at the rate of 23%. Normally capital gains realised by a non-­‐resident company on a sale of shares in a UK real estate company are not normally subject to UK tax. However, by virtue of anti-­‐avoidance legislation, the UK tax authorities may direct the purchaser to withhold 20% tax from the purchase price. The present document only has an informative purpose, and constitutes neither a tax advice, nor any part of a contract or an offer. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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