The way in which your rental income will be taxed is changing. Companies will come within the Corporation tax regime from 6 April rather than the more familiar Income tax regime. This has implications for the information you are required to disclose on your tax return, the way in which it is presented and the due dates for the forms and the tax payments. In some cases the alternative rules under the Corporation tax regime may result in a different calculation of the company tax liability.
There are also changes in the way in which you will need to report a disposal of any property held by the company and you will need to register for corporation tax within 3 months of the disposal unless you are already registered for corporation tax. The corporation tax due will normally be payable nine months after the accounting year end and in some instances may be payable as early as 3 months and 14 days after the date of disposal.
HMRC is beginning the switch over the process and you may already have heard from them with a new tax reference number. If you have any questions about how the transition affects you please do come to talk to us. You can contact your usual Mercer & Hole partner or Jacqui Gudgion.