Income tax on property income

This represents an increase from the current basic rate of income tax at 20%. The real estate investment sector will be watching with interest how this change is applied to withholding regimes. Non-resident landlords and investors in UK REITs are both currently subject to withholding at 20% on payments of property income/property income distributions. It is likely that these rates could be increased to 22%, affecting after-tax returns for individual landlords and for individual and non-UK resident corporate investors in UK REITs. In addition, devolved governments in Scotland and Wales will have the ability to set property income tax rates in line with their current income tax powers, so that different rates could apply in respect of individuals resident in Scotland and Wales.

Authored by Christopher Hyde.