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) |
| 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) |
| 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) |
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.