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UK Commercial Property - Understanding the Tax Issues

Learn how to avoid the traps in UK Commercial Property by exploring key tax cases

UK Commercial Property & Tax Issues Online Training Course

A one-day course

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This course is a ‘must know’ for: 

  • Staff dealing with private client issues particularly involving high net worth individuals
  • Business owners looking to invest in property
  • Corporate tax specialists dealing with businesses transacting in property
  • Conveyancers who need to understand the tax background to property transactions

 And a ‘nice to know’ for: 

  • General practitioners looking to add value to services provided to clients

  • The course covers a wide range of business, personal and indirect taxes such as commercial property VAT, tax relief for finance cost and structures and buildings allowance
  • There are many numerical examples to aid understanding of potential tax exposure for commercial land

This course will update delegates on the following:

  • The range of taxes on property that apply to buying and selling commercial property regarding the differences which apply to residential property
  • How different ownership structures impact tax rates 
    • Non-resident companies with UK property businesses i.e. commercial land
    • Non-resident landlord scheme
  • The tax relief available for buildings 
    • Structures and buildings allowance
    • Integral plant
  • Leases 
    • Premiums
    • Onerous leases
    • Capital gains issues
  • How taxable rental income and relief for finance costs differ for individuals and companies
  • The capital gains on commercial property rules for non-residents disposing of UK commercial property and land
  • The key commercial property VAT principles of property transactions 
    • The different rates that apply in different circumstances
    • Option to tax
  • Stamp taxes and key reliefs

Overview

  • What do we mean by commercial land and buildings?
  • The distinction between property investment and property dealing, and is this an issue HMRC considers?
  • How different ownership methods (g. direct/company/trust) impact the tax charges and the planning opportunities which exist
  • Non-resident landlords 
    • Non-resident companies with UK property businesses, including changes from 6 April 2020
    • Issues with non-resident landlords scheme
  • REITs 
    • Key tax issues for investors and the fund
    • Update on changes to legislation on REITs

Expenditure on buildings

  • Capital/revenue distinction, including 
    • repairs/renewals and relevant case law
    • case study on the potential differences in tax relief
  • Capital allowances for ‘integral plant’ in buildings
    • Definition of integral plant
    • Anti-avoidance relating to integral plant
  • The purchase of buildings containing fixtures 
    • The impact on capital gains of allocating value to fixtures
    • The FA2012 provisionse. Finance Act 2012 provisions and their practical application, including elections under s198 CAA2001
    • The negotiation of the figures including a case study on the tax impact of that decision
  • Structures and Buildings Allowance 
    • What qualifies and rates for structures and buildings allowance
    • Implications on structures and buildings allowance when a qualifying building is bought/sold
    • Compliance issues for structures and buildings allowance including recent changes
  • Lease premiums 
    • Tax impact on the tenant
    • Tax impact for the landlord
  • Lease incentives including rent-free periods and fit-out costs as an alternative to reverse premiums
  • Onerous leases 
    • Payments by landlord and tenant to bring the lease to an end
    • Planning opportunities including payments under dilapidations provisions

Calculating taxable rental income

  • The different rules for individuals and companies
  • Tax relief for finance costs
  • How losses can be relieved
    • Losses created by capital allowances

Capital Gains Tax (CGT)

  • Allowable costs and the calculation of gains arising
  • Calculation of gains on grants and assignment of leases
  • The complications of connected party transactions
  • CGT e. capital gains tax on commercial property for non uk resident and the planning opportunities for such persons

Value Added Tax (VAT)

  • The different rates that can apply to commercial property transactions with tax benefits of commercial real estate
  • Option to tax land or commercial buildings
    • Why it is done
    • Compliance procedures
  • Common problems and errors
  • Key cases

Stamp taxes

  • The stamp tax cost of commercial transactions and identifying property to which non-residential rates apply
  • The differences between regimes in England, Northern Ireland, Scotland and Wales
  • The principal reliefs available and the planning opportunities
    • Group relief
    • Sale and leaseback relief
  • Stamp taxes issues on granting and surrender of commercial leases
    • Restructuring of leases and the stamp taxes complications

The trainer started her career with HM Inland Revenue as a Fully Trained Inspector before qualifying as a Chartered Tax Advisor whilst still working for the department.  She worked in the Large Business Office and in the local District network, covering all aspects of direct tax.

She left in 2000 to become a consultant before setting up in business, providing training and consultancy.  The training involves CPD seminars, exam training, mentoring, and bespoke in-house training for all levels of accountants and tax specialists.  The consultancy involves accountants and businesses on all aspects of tax planning and dealing with tax disclosures, HMRC enquiries and Tribunal cases.  All aspects of direct tax and Stamp Duty Land Tax are covered.

The trainer believes that the interaction between training and consultancy is vital to providing the highest quality service in both areas.  The consultancy allows the training to be practical by focussing on real cases where problems have been encountered and solved.  The experience of providing consultancy allows the training to interact with delegates encouraged to participate and discuss their cases.  

Understanding UK property taxes on commercial property have become increasingly complex in recent years. There are several high-risk compliance areas and anti-avoidance provisions, that can catch the unwary and prove very costly in terms of unforeseen tax liabilities and penalties. At the end of the session, participants should be aware of the major tax issues, both compliance and planning, that are likely to arise on construction projects and property purchases or sales. Key tax cases will be discussed and the tax traps that you should try to avoid will be highlighted.

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