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Overseas Property Tax
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Avoiding tax on UK and overseas property disposals
This section covers articles on: - How to avoid UK tax on overseas disposals
- How to use offshore structuring to reduce tax on UK properties
In short, any articles on property purchases and disposals with an offshore dimension are included in this section. Join up today to read unique tax planning articles and obtain online tax guidance on avoiding tax on overseas properties.
Overseas property investmentOf increasing importance to property investors are overseas property developments. Investors looking to benefit from high levels of capital growth often look overseas. This opens up even more tax planning opportunities as now there are two (or more) jurisdictions to consider, as opposed to one. Anyone buying an overseas property will be concerned with issues such as: Offshore tax books
We specifically look at avoiding tax on overseas property investments in our printed offshore tax books:
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Offshore Tax Advice Books |
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Overseas Property Tax ArticlesIn addition to the tax books above we cover lots of up to date tax articles on UK and overseas property investment topics on our site. Have a look at the articles below!
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Transfer property to company - USERNAME: putney1943
Tax Question: My wife and I jointly own an apartment in Spain , approx value 300k. It is free of any mortgage. We have a property company which has surplus funds. We would like to release the equity in the apartment, but prefer to keep it or to possibly buy another. Is there a way funds from our property company can be used for the purchase of our apartment, and if so, would it be beneficial from a tax point of view. Does it make sense, or is there a better way. . . .
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Buying a property in the US and UK tax -
USERNAME: nondom1
Tax Question: Hello All, I'm thinking about buying property in Memphis and potentially using an LLC. 1. How is a US LLC currently considered in the UK? 2. If the answer to the above is as "opaque" does this mean it is effectively treated like a US company for UK tax purposes? The below questions also assume the answer is "yes". 3. Does this mean that in years that there is no profit extraction there is no need to fill out any LLC details on the UK tax return? 4. Do you have any advice as to how to minimise taxes on profit extraction assuming a dividend rate of 42.5%? Using low earning family members etc.? 5. This is likely to be out of your remit but do you know whether pass-though US LLCs are eligible for standard deduction and personal exemption in the US? Can I find the answer on your website? 6. Is there any way to getting HMRC to treat the LLC in a pass-through manner like in the US? Thanks . . .
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PPR relief on overseas property - USERNAME: charliebrown
Tax Question: A non-dom client sold their Spanish property last year. In the process of computing the capital gain (which included a rather large forex gain due to the movement in exchange rates), the client has asked me to treat the Spanish property as their PPR. The client (of Spanish origin) is resident but non-domiciled in the UK for tax purposes, and rents a property in the UK which he uses as a base between "travelling" and spending time in Spain with family. When in Spain he resides in his Spanish house which is never let out and maintained for his sole use. The client is currently submitting tax returns on an arising basis. So he doesn't own the UK flat but from my understanding of HMRC guidance it would appear that he has an interest in the flat as a tenant, and therefore unless an election is made HMRC could treat the UK flat as his PPR with the result that PPR relief cannot be claimed on the Spanish house. Should therefore a late election under ESC/D21 be made (the Spanish property was bought over 6 years ago)? Many thanks for your help. . . .
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Tax implications of buying property with an overseas mortgage
16/11/2011
If you're considering buying overseas property, financing this with an overseas mortgage is a common strategy. What many investors don't consider though are the tax implications of this - some of which can be very costly to overlook. This article looks at the key UK tax implications of using an overseas mortgage to purchase overseas property. . . .
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Tax relief for Swiss tax suffered on letting property - USERNAME: Denise
Tax Question: I have husband and wife clients who have jointly owned a property in Switzerland for a number of years. They are UK resident. In late 2010 they started to let the property. They have provided me with details of various taxes paid in Switzerland, including Cantonal and Community Taxes (Impot sur le Revenu et la Fortune), Federal Tax (Impot federal direct), Tax de Sejours and Commune Property Tax (Impot Foncier). I am completing the UK tax returns and am trying to understand which, if any, of these taxes are deductible or allowed as a credit: a) as a deduction in computing the net rental income, or b) as a foreign tax credit against the net rental income, or c) as a foreign tax deduction against the net rental income (normally only if there is a net loss and foreign tax credit at b) not available). I have seen the guidance at HMRC DT18102 which shows that Impot sur le Revenu and Impot Federal direct are admissible as a credit under the Swiss/UK DTA, whereas Impot sur la fortune is not. But is the whole of the Impot sur le Revenu and Impot Federal allowable as a credit against the net rental income, or as a deduction if there is a net loss (I understand the tax is in effect a tax on the notional rental income and is payable whether or not the property is let)? And is the Impot sur la Fortune allowable as a deduction against the net rents if not admissible as a credit? I understand that there is no tax charge in Switzerland directly on the rental income so it seems that my clients pay the same amount of tax in Switzerland regardless of whether the property is let or not. So is any of the Swiss tax deductible against the rents for UK tax purposes? Can you help please? . . .
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Using an offshore trust to buy a UK property to reduce UK tax
10/01/2011
'Can I use an offshore trust to buy a UK property and save UK tax?' - It's a common question that we're asked, particularly by non doms who may already have an offshore structure in place. In this article we'll look at the key UK tax implications of using an offshore trust to purchase a UK property. . . .
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Tax relief for property investors on overseas interest and finance costs.
If you're borrowing money from overseas to invest in property you need to assess firstly what level of tax deduction you'll be entitled to for the interest and secondly whether you'll be caught by the withholding tax rules. If you are caught by the withholding tax rules you'll also need to consider what options you have to avoid having to pay 20% of the interest to the UK taxman. This article tells you what you need to know to avoid UK withholding taxes on overseas interest. . . .
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Moving assets offshore for tax purposes
Moving assets offshore to avoid tax is often essential to reduce UK taxes. Non UK residents or non UK domiciliaries can be charged to UK tax on UK assets or income but exempt on overseas assets/income. Establishing assets as located offshore can lead to massive tax savings if you fall into one of these categories. This article looks at some of the tax issues involved. . . .
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Maximising private lettings relief to reduce CGT
Lettings relief is not as well known as principal private residence relief, however where it applies it can be very effective in further reducing your capital gains tax charge. This article looks at how lettings relief operates as well as how to maximise the amount of lettings relief to reduce your capital gains tax . . .
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Establishing a property as a main residence in 2010
Establishing a property as a main residence can be very attractive in terms of reducing your tax charge on a future disposal. This is due to the fact that a property that has been occupied as a main residence will qualify for principal private residence ('PPR') relief. This article looks at some of the main points to consider when establishing a property as a main residence and also includes a handy checklist of 'evidence' that could prove invaluable in arguing a property was a main residence. . . .
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How best to structure small scale overseas property development
With the advent of many low entry cost property development opportunities overseas an issue that is often important is what is the best structure for this. What we're considering here are small scale operations. The large investors will be likely to already have an established offshore structure in place - but what about the newbies - how should they proceed? . . .
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Checklist to avoid Capital Gains Tax when you emigrate
Although the rate of CGT has now reduced to 18% on investment assets if this is still too high for you, one option is to move overseas and sell as a non UK resident. This area is a minefield and there are lots of tax issues to consider. With something as important as this it's useful to have a handy checklist to ensure you've covered all the key bases. This article highlights the main tax points for you to consider to make sure you can sell up free of UK capital gains tax. . . .
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Uk and Spanish tax planning when buying and selling Spanish property
This is essential reading for anyone buying a property in Spain. It looks at which is the best way to purchase and sell your Spanish property and in particular how to avoid and reduce Spanish and UK capital gains tax on a disposal. It also looks at your income tax position and covers how you can reduce your UK and Spanish income tax liability. We look at not only the UK and the Spanish tax implications but importantly the interaction of the two tax regimes for you as a UK resident, and even if you decide to emigrate. . . .
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Offshore Tax Book
Non Dom Tax Book
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