There had been an expectation that the long-awaited changes to the UK/Luxembourg double tax treaty would come into force this year; however as the treaty has not been ratified by Luxembourg the changes will not take effect until 2024. From a real estate perspective one of the key changes is removing the exemption from UK tax for Luxembourg companies selling UK property rich vehicles. Unlike the extension in domestic legislation of capital gains tax to non-residents owning UK real estate this change will not be accompanied by a rebasing of affected companies’ assets. This means that the date of the treaty change will be a cliff edge for these companies many of whom may well look to exit their investments (or perhaps onshore them) prior to the change.
HM Treasury’s proposals on sovereign immunity reform will be eagerly...
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