{"text":[[{"start":9.04,"text":"Sovereign wealth funds will be taxed on their property investments in the UK for the first time as part of a change that is expected to raise almost £700mn a year by the end of this decade."}],[{"start":21.2,"text":"The UK government announced on Wednesday that corporation tax, currently levied on sovereign investments in UK companies, would now also be levied on those investments in “directly held” real estate."}],[{"start":33.02,"text":"The change, which is set to hit countries such as the Gulf states that are big property investors in the UK, comes at a delicate time for the government."}],[{"start":41.523,"text":"It is navigating strains in its relationship with the United Arab Emirates over any eventual punishment dealt to Manchester City after the football club was found guilty of breaking the Premier League’s financial rules, which ministers fear could affect future UK investments from Abu Dhabi."}],[{"start":57.541,"text":"Sovereign wealth funds have significant holdings of UK real estate, with funds such as Norges Bank Investment Management and Qatar Investment Authority owning broad swaths of London."}],[{"start":66.56,"text":"Sovereign investors, including from the UAE, have also poured money into build-to-rent properties."}],[{"start":74.5,"text":"Income earned by sovereign wealth and state-backed pension funds has previously been allowed immunity from direct taxes on UK income and gains."}],[{"start":82.796,"text":"Chancellor John Healey said on Wednesday that the changes would bring UK rules more in line with other countries while remaining “one of the most generous regimes in the world”."}],[{"start":92.48,"text":"The government, which also said corporation tax would be due on “trading income in limited circumstances”, forecasts the changes will raise about £690mn by 2029-2030. In addition, it said it would offer sovereign funds “unique access” to UK real estate investment trusts at a lower corporation tax rate of 15 per cent."}],[{"start":114.365,"text":"The real estate industry was critical of the proposals, however, warning it could lower sovereign investment."}],[{"start":121.274,"text":"Andrew Teacher, founding partner at real estate advisory firm Lauder Teacher Associates, said the proposal “risks adding further fuel to the perception that Britain does not want foreign investment”."}],[{"start":131.11,"text":"The government said it planned to legislate to create a new class of sovereign investor that would apply to foreign states, heads of state, governments, sovereign wealth and pension funds and central banks."}],[{"start":141.68,"text":"One former Treasury minister said the last Tory government looked at changing the sovereign tax rules in 2022 but that Sir Jeremy Hunt, the chancellor at the time, scrapped the idea in 2023, fearing a backlash from overseas investors."}],[{"start":156.041,"text":"The government’s Red Book said the new statutory regime would take effect from the start of 2029, with revenues forecast to reach £495mn in tax year 2028-29, before peaking at £690mn the following year, then falling marginally thereafter."}],[{"start":174.315,"text":"However, the Office for Budget Responsibility said the costing was “highly uncertain” because of a lack of “administrative data on the tax and assets of the affected group” while warning it was not clear how “groups will respond to minimise the impact of these changes”."}],[{"start":187.92,"text":"The government plans to hold a technical consultation with stakeholders on draft legislation before it is introduced in the 2027-28 Finance Bill."}],[{"start":198.96,"text":"Additional reporting by George Parker in London"}],[{"start":203.28,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1793256385_6646.mp3"}