Entity Setup
Entity Setup Alert: ICTS, Non-Resident Capital Gains & ATED Reforms You Can’t Ignore
Budget 2025 will introduce an International Controlled Transactions Schedule, tighten non-resident capital gains rules and ATED relief claims—with many changes effective from 6 April 2026.
By NomadicTax Research Team • 5-8 min read • March 27, 2026
## Reforms coming down the line for entities and non-resident structures
From Budget 2025 and related legislative action, these are key changes for companies, property entities, and non-resident individuals:
| Measure | Effective Date | What to Look Out for |
|---|---|---|
| **International Controlled Transactions Schedule (ICTS)** | accounting periods beginning **on or after 1 January 2027** | Multinationals will need to file detailed ICTS reports as part of CT tax returns. Start preparing systems to capture intercompany pricing and transactions. ([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai)) |
| **Non-Resident Capital Gains & Dividend Tax Credit changes** | from **6 April 2026** | The tax credit for non-UK residents on UK dividends is being abolished. New rules for non-resident capital gains on property and potentially other assets. Entities holding UK real estate or receiving UK dividends should review structure and expected cash flows. ([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai)) |
| **Annual Tax on Enveloped Dwellings (ATED) relief claims process** | from **date of Royal Assent to Finance Bill 2025-26**, and ATED charges rising **1 April 2026** | Late relief claims window removed; ATED annual charges will reflect CPI rises. Property holding entities must keep close watch on valuations and ensure compliance. ([gov.uk](https://www.gov.uk/government/publications/budget-2025-overview-of-tax-legislation-and-rates-ootlar/budget-2025-overview-of-tax-legislation-and-rates-ootlar?utm_source=openai)) |
## What entities should do now (actionable tips)
- **Health check your ownership structure**: UK vs offshore entities holding UK property will be affected differently, especially for non-resident CGT and ATED.
- **Forecast cash flows**: dividend yield and tax credit losses may reduce net income for foreign shareholders.
- **Upgrade accounting systems**: ICTS reporting demands detailed transaction-by-transaction disclosures; start capturing required data now.
- **Review ATED relief eligibility**: If your entity qualifies, apply before the changes; ensure reports are timely to avoid penalties.
- **Seek professional advice**: Many of these changes interact with treaty rules and past investments; cross-border compliance should be reviewed.
## Example scenario
An overseas company owns several UK residential properties via a UK SPV.
- It currently claims ATED relief annually and benefits from the dividend tax credit on rents.
- From **6 April 2026**, dividend tax credit no longer applies for non-UK resident individuals—expect a higher tax burden or loss of relief.
- For capital gains on property disposals, new rules require non-residents to report and pay CGT where previously they might have claimed exemptions.
- ICTS obligations may affect intercompany charges or rental management expenses across borders.
## Bottom line
If you run or set up an entity owning UK real estate or dealing with cross-border dividends and inter-company dealings, the period around **April 2026** is one of significant change. Address structure, accounting, ownership, and reporting to avoid surprises.