Do you own property in the UK?
Do you know about the non-resident landlord scheme?
Do you know your Capital Gains Tax liabilities and/or level of Inheritance Tax to pay?
Here is what you need to know:
Regardless of whether or not you reside in the UK or are domiciled there, you may be liable for UK property taxes.
Income tax is chargeable on any rental income you receive from any UK property, which must be reported to HMRC annually.
If your property is let for that tax year, the non-resident landlord scheme allows you to register for non-resident landlord status.
You have to meet certain conditions, but this allows rental income to be paid to you gross on the basis that you will complete a tax return annually and pay any income tax due. Not registering with the scheme requires your property agent (if you have one) or your tenant to deduct 20% withholding tax from the rental payments due to you and pay that directly to HMRC. You still need to complete a return and pay any extra tax due or claim a refund. From a cash flow perspective, it may be helpful to receive the rent gross and then account to HMRC when filing your tax return.
Our tax compliance team can assist with registering the scheme and completing the return. Thus, ensuring you are compliant and accurate with your responsibilities whilst claiming any benefits and reliefs you ate entitled to.
Capital Gains Tax
Are you selling a property in the UK? There may be exemptions available. However, a Capital Gains Tax (CGT) computation will likely need to be undertaken. For example, if you have occupied the property as your primary residence at some point.
It is important to note that as a non-resident, you only have 60 days from selling the property to file the necessary tax return. In addition, if you dispose of rights to assets that derive at least 75% of their value from UK land (for instance, company shares that mainly hold property interests), you are also required to file a return within this timeframe and pay CGT on the appropriate amount.
We can assist with advising you on your CGT liabilities and any exceptions to be claimed as well as completing and filing the return for you.
Inheritance tax
Inheritance tax is payable on UK property assets irrespective of where you are domiciled. We can assist with advising you on aspects such as:
- The nil rate band and residence nil rate band and whether it is claimable as well as any transferable nil rate band and residence nil rate band.
- Exceptions and reliefs such as business property relief, agricultural property relief, and spouse exceptions.
- Deductibility of loans on the property.
- Whether the estate could be restructured, both before and after death to maximise the ability for relief.
- Structures and plans are in place to minimise the inheritance tax liability.
We can also advise on double tax conventions with other jurisdictions so you understand which country has taxing rights and how this may impact your liability in the UK.
Please contact us for further information.
