Commercial property owners could be stung for more than £8.6 billion if they fail to revalue ahead of a major tax change, according to research by specialist tax relief firm Catax.
This means that properties held in trust in jurisdictions such as Jersey, Guernsey and the Isle of Man will be brought into line with those held on the UK mainland.
As it stands for commercial properties in the UK, held by British property entities, the original purchase price is used to calculate the capital gain. However, between now and April 2019, owners are being urged to ‘rebase’ to reflect their current value – meaning any future calculation for capital gains uses the new, more favourable, valuation.
This protects owners from challenges from HMRC upon any future disposal. If commercial property owners don’t do this, the implications for their capital gains tax bills could be severe.
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Upcoming Tax Change Could Cost Commercial Property Owners More Than £8.6 Billion