UK Law and Practice Contributed by: Roger Gherson, Alfred Gherson, Lisa Uttley and David Tipping, Gherson Solicitors
1.6 Stability of Tax Laws The UK has been through a prolonged period of rela - tive political uncertainty. At the time of writing, Keir Starmer has resigned and Andy Burnham has just become the UK’s fifth prime minister in four years. Keir Starmer’s Government had introduced a number of significant changes that are still coming into effect. In addition to the abolition of the remittance basis and the introduction of the FIG regime, the current Govern - ment has enacted several other reforms, including: • a new concept of “long-term UK residence” replac - ing domicile as the connecting factor for IHT; • excluded property trusts having been limited such that a trust will only be excluded property for the purposes of IHT while the settlor is not a long-term UK resident; • 100% relief in respect of BPR and APR has been capped at GBP2.5 million; • with effect from 6 April 2027, pensions will be sub - ject to IHT. However, as noted above, a new Government under Andy Burnham may mean further significant changes in the near future. 1.7 Transparency and Increased Global Reporting Over recent years, there has been a shift towards greater transparency requirements. The UK co-operates with both the US Foreign Account Tax Compliance Act (“FATCA”) and the OECD’s Com - mon Reporting Standard (“CRS”). Since 18 November 2025, Companies House (which maintains the register of UK-incorporated companies) has introduced mandatory identity checks for direc - tors of UK companies and persons with significant control. HMRC maintains the Trust Registration Service, which records the beneficial ownership of almost all express trusts in the UK. New legislation has introduced a de minimis exemption for certain low-value trusts, but the majority of express trusts are still expected to register.
narily, tax must be withheld at the basic rate under the non-resident land scheme. However, it is important to note that the definition of “non-resident” under the NRLS is not the same as residence under the statutory residence test. Instead, a landlord is ‘non-resident’ for the purposes of NRLS if the person’s usual place of abode is outside the UK. A landlord can apply to HMRC to receive their rental income without withhold - ing tax. Where the property is the individual’s only or main residence, Principal Private Residence relief is likely to apply such that any capital gain arising on a disposal is exempt from CGT. If the real estate is commercial property, holding it via an overseas company has an advantage for IHT purposes. The property itself is a UK-situs asset and would therefore be subject to IHT on the individual’s death if owned directly, irrespective of whether the individual is a long-term UK resident. However, if the property is held through an overseas company, the shares of that company will generally not be situated in the UK. Consequently, the shares will be excluded property if the individual is not a long-term UK resi - dent. Where the property is a residential dwelling, there are no particular tax advantages to holding it through any offshore structure. Any interest in a holding company which derives at least 75% of its value from UK land (whether residential or otherwise) is subject to non- resident CGT. Further, for the purposes of IHT, an interest in an overseas close company is not excluded property to the extent that its value is derived from residential property in the UK (or, since 6 April 2026, agricultural property in the UK). Finally, a company that holds residential dwellings is subject to the Annual Tax on Enveloped Dwellings (or ATED), which requires the company to file a return each year and pay an annual tax based on the value of the property. It should be noted that there is an exemption from ATED for properties that are let to a third party on a commercial basis and are not occupied by anyone connected to the owner.
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