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Where Taxpayers and Advisers Meet

IOM company selling property

Joined:Wed Nov 11, 2020 1:16 pm
IOM company selling property

Postby vbo » Wed Nov 11, 2020 1:57 pm

An IOM registered Company owns several blocks of flats in UK, so earns rentals

Rents declared annually, losses made/available so no CT paid in UK or IOM (CT is 0%)

Are those assets classed as Residential or Commercial? - they are residential units which are owned for 'commercial' purposes.

If a building of is sold at a profit, does the Company pay Corporation Tax or Capital Gains Tax on the sale.

Can trading losses b/f be offset against the gain?

Joined:Wed Aug 06, 2008 3:25 pm

Re: IOM company selling property

Postby maths » Wed Nov 11, 2020 8:59 pm

The company possess an "interest in UK land" [TCGA 1992 s2B(4)(a)] and thus is liable to corporation tax on any chargeable gains on sale of the UK land [TCGA 1992 s2B(4)].

An "interest in land" includes buildings thereon [TCGA 1992 s1C(6)].

Prima facie the company invests in UK residential properties for the purposes of receiving rental income in which case the company's activities do not give rise to trading losses. The company's activities are those of a UK property business [CTA 2009 s204]..

As a consequence, any profits of the UK property business or property income from the UK property business are subject to UK corporation tax [CTA 2009 s 5(3A) and (3B)]. Thus, non-resident companies are no longer subject to UK income tax on UK source rental income CTA 2009 s3].

Property income losses may be carried forward and offset against subsequent property income profits but not against chargeable gains.

Joined:Wed Aug 06, 2008 3:39 pm
Location:Operate Nationally but based in Aberdeen

Re: IOM company selling property

Postby wamstax » Wed Nov 11, 2020 10:36 pm

Of course it could be that the IOM company could be controlled from within the UK and therefore be UK Corporation Tax company and therefore liable to UK CT in any case for all periods
regards and hope this helps
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

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