Recent years have seen a transformation in the taxation of property ownership in the UK, with further changes proposed over the next few years.
Most property owners, investors and developers will be affected by at least some of the changes.
When buying a property, stamp duty land tax is always a concern. Since April 2016, a 3% surcharge has applied to individuals buying a second home in the UK (even if their first home is overseas).
We also now have special rates for first time buyers and devolved taxes with different rates and bands in Wales and Scotland.
Restrictions on interest deductions for individual landlords (that will increase their taxable profits) will be fully phased in by April 2020.
In parallel, restrictions now apply to companies that pay over £2m interest per year. Affected companies can submit a separate tax return to make various elections to limit the tax impact.
However, failing to nominate a reporting company for a group within the deadline could result in a higher tax bill.
The way you hold a property has also come under scrutiny with the specific annual tax on dwellings held within a company (enveloped) increasing and extended to lower cost homes. From April 2017, a range of changes for non-UK domiciled individuals can bring UK property held within offshore structures into the UK inheritance tax net.
Further proposals will create of a register of beneficial ownership identifying all non-UK owners of UK property from 2021 onwards.
When selling a UK residential property, gains made by non-UK resident individuals have been taxable since 2015: this will also apply to non-UK resident companies from April 2019. And the tax is payable within 30 days, which will also apply to UK resident sellers from April 2020.
New rules introduced in 2016 ensure that profits from dealing in and developing UK land are taxed whether or not the landowner is UK-resident.
Why all this change? OECD statistics show that the UK derives a bigger share of its tax revenue from property than any other country.
However, in percentage terms, the share of total UK taxes that arises from property has actually fallen over the last 50 years. So it is no surprise that the government keeps finding new taxes to protect its tax take.
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