As specialists in tax Advisory and Accountancy we are aware of the challenges faced by property investors / landlords / developers in the UK, with ever-changing legislation and complex regulations. Here are some of the main tax concerns that we frequently help our clients navigate.
  1. UK residents abroad
    If you are a UK resident but live abroad, you are usually liable to pay UK income tax on your worldwide income, which includes income from renting out a property, regardless of the property’s location. After deducting allowable expenses, the income will be subject to UK income tax. For companies, the treatment is similar. A UK resident company is liable to corporation tax on its worldwide profits, which includes rental income from properties, wherever those properties are located.

    Learn more here about Foreign Income and Gains
  2. Non-UK residents with UK property
    Non-resident individuals and companies are subject to tax on income they receive from renting out a UK property. For individuals, this tax is typically collected via the Non-Resident Landlord Scheme (NRLS), in which tax is deducted at source by a letting agent or tenant. Non-resident companies also pay corporation tax on the profits from a UK property business, which includes rental income.

    Learn more here about Non-UK Resident Property Income
  1. UK residents abroad
    UK resident individuals and companies are liable to UK Capital Gains Tax (for individuals) or Corporation Tax on chargeable gains (for companies) on gains made from the sale of properties, wherever they are located in the world. However, certain reliefs might apply if the property being sold has been the individual’s only or main home at some point.
  2. Non-UK residents with UK property
    Non-UK residents, both individuals and companies, are required to pay tax on gains from selling UK residential property. The tax is charged on the gains arising after 5 April 2015. Non-residents must inform HM Revenue and Customs (HMRC) within 30 days of completion, even if there is no tax to pay.

    Learn more here about Non-UK Resident Property Capital Gains
As a general rule in international taxation, property income and gains are usually taxed in the country where the property is located. This rule is often included in Double Taxation Agreements (DTAs), which are designed to prevent the same income or gains from being taxed in more than one country. For instance,
  • If a UK resident earns income from a rental property located in another country with which the UK has a DTA, the income may be taxed first in the country where the property is located. To avoid double taxation, the UK will usually provide a credit for the foreign tax paid, effectively reducing the UK tax owed
  • If there is no DTA, the UK generally provides Unilateral Relief, which also allows a credit for foreign tax paid on the same income.
  • In contrast, non-UK residents who earn income or gains from UK property are taxed in the UK, as the UK retains the right to tax income and gains arising from UK land and property.
  • Remember, the application of these tax laws can vary significantly based on individual circumstances and the specific provisions of a DTA. It’s always recommended to seek professional advice when dealing with these issues.
Why work with us?
At UK Tax Advice and Accountancy, we believe in personalised service, understanding each client’s unique circumstances, providing tailored solutions, timely service, and peace of mind.