INTM601280 - Transfer of assets abroad: The income charge: Measure of income - income from property

Where there is rental income, any profits should be arrived at in accordance with the rules in Part 3 ITTOIA 2005.

Where a person abroad is in receipt of rental income from the UK, there are various provisions for taxing the income including the Non-Resident Company Landlord Scheme. Where an individual is chargeable to the income charge, the amount of any tax paid (and not repaid), will need to be ascertained to prevent any double charging.

Before 6 April 2020, the rental profits of non-resident company landlords were subject to income tax. In calculating the income of the person abroad for the purpose of an income charge on a UK resident individual, a credit for the income tax paid by the company will be given.

From 6 April 2020, the rental profits of non-resident company landlords are subject to corporation tax. In calculating the income of the person abroad, the income tax rules in Part 3 ITTOIA 2005 as to the deductibility of certain expenditure continue to be applied, as the transfer of assets provisions are an income tax charge. Where UK corporation tax has been paid by the non-resident company landlord, a credit will be given against any income tax payable by the individual under the transfer of assets provisions to avoid any double charging.

Where there are disposals of land or property, the Transactions in Land provisions found at Chapter 3, Part 13 ITA 2007 may be in point if it appears that transactions are artificially creating a capital gains tax charge, rather than an income charge.