Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Markets Failing to Give Another AI Mega-trend Buying Opportunity - 6th Jun 20
Is the Stock Bulls' Cup Half-Full or Half-Empty? - 6th Jun 20
Is America Headed for a Post-Apocalyptic Currency Collapse? - 6th Jun 20
Potential Highs and Lows For Gold In 2020 - 5th Jun 20
Tying Gold Miners and USD Signals for What Comes Next - 5th Jun 20
Rigged Markets - Central Bank Hypnosis - 5th Jun 20
Gold’s role in the Greater Depression of 2020 - 5th Jun 20
UK Coronavirus Catastrophe Trend Analysis Video - 5th Jun 20
Why Land Rover Discovery Sport SAT NAV is Crap, Use Google Maps Instead - 5th Jun 20
Stock Market Election Year Cycles – What to Expect? - 4th Jun 20
Why Solar Stocks Are Rallying Against All Odds - 4th Jun 20
East Asia Will Be a Post-Pandemic Success - 4th Jun 20
Comparing Bitcoin to Other Market Sectors – Risk vs. Value - 4th Jun 20
Covid, Debt and Precious Metals - 3rd Jun 20
Gold-Silver Ratio And Correlation - 3rd Jun 20
The Corona Riots Begin, US Covid-19 Catastrophe Trend Analysis - 3rd Jun 20 -
Stock Market Short-term Top? - 3rd Jun 20
Deflation: Why the "Japanification" of the U.S. Looms Large - 3rd Jun 20
US Stock Market Sets Up Technical Patterns – Pay Attention - 3rd Jun 20
UK Corona Catastrophe Trend Analysis - 2nd Jun 20
US Real Estate Stats Show Big Wave Of Refinancing Is Coming - 2nd Jun 20
Let’s Make Sure This Crisis Doesn’t Go to Waste - 2nd Jun 20
Silver and Gold: Balancing More Than 100 Years Of Debt Abuse - 2nd Jun 20
The importance of effective website design in a business marketing strategy - 2nd Jun 20
AI Mega-trend Tech Stocks Buying Levels Q2 2020 - 1st Jun 20
M2 Velocity Collapses – Could A Bottom In Capital Velocity Be Setting Up? - 1st Jun 20
The Inflation–Deflation Conundrum - 1st Jun 20
AMD 3900XT, 3800XT, 3600XT Refresh Means Zen 3 4000 AMD CPU's Delayed for 5nm Until 2021? - 1st Jun 20
Why Multi-Asset Brokers Like are the Future of Trading - 1st Jun 20
Will Fed‘s Cap On Interest Rates Trigger Gold’s Rally? - 30th May
Is Stock Market Setting Up for a Blow-Off Top? - 29th May 20
Strong Signs In The Mobile Gaming Market - 29th May 20
Last Clap for NHS and Carers, Sheffield UK - 29th May 20

Market Oracle FREE Newsletter


What move should overseas investors make next in UK property?

Housing-Market / UK Housing May 27, 2015 - 04:23 PM GMT

By: Submissions


Peter Scully writes: From 6 April 2015 there will no longer be tax advantages for non-UK residents who invest in the UK residential property market.
These changes have seen Capital Gains Tax (CGT) exemption being removed along with restricted access to Private Residence Relief (PRR) as well as the potential removal of personal allowance for income tax.

Overseas investors may now benefit from different types of property investment as opposed to directly holding UK residential property which can offer them a similar level of exposure as well as a good opportunity for investment that comes with a better tax efficiency.

The new tax changes are having an impact on those overseas investors who own a UK property and this is through the removal of Capital Gains Tax exemption which came into effect in April and any gains from April onwards will be charged at a rate of up to 28%. They have seen their Private Residence Relief restricted which means that should they plan to claim PRR on a property that they own in the UK they would have had to live in that property for more than 90 days per tax year of ownership. There is a possibility that income tax could be removed as it is under review which means that it could be restricted for non-residents in the future.

Overseas investors also have to consider inheritance tax as there is a belief that estates that belonged to UK domiciled clients are susceptible to UK inheritance tax; however, this is not true as most assets in the UK, including those held by non-domiciled owners will be charged at a standard rate of 40% if above £325,000.

However, there are other possible investments that can be considered. Should an investor have an interest in investing in the UK property market but they have a concern regarding tax implications then they could have a property fund as part of their portfolio. This will result in the investor owning a share in the fund as opposed to owning the property which would make it easier to sell. There is also the bonus of investment funds being efficient when it comes to capital gains tax if the investor has been a non-resident for over five years.

Overseas investors could also invest in an offshore bond, building an investment portfolio within an offshore bond wrapper which can help avoid some taxations problems. Most income and all gains from bonds are based on a gross roll up which means that tax is only payable when the bond holding is encashed.

There is another key advantage to offshore bonds because there is no income generated, which means nothing has to be declared to HMRC so there is no administrative problem when it comes to making assets known on the annual tax return.

The taxations changes could result in a decrease in direct investment from overseas investors in the UK residential property market. Most portfolios will see some advantages whilst investing in a property fund via an offshore bond can help to reduce the burden of tax. For those who currently invest in a UK residential property should check their holdings to see if the new tax changes will affect them.

The Overseas Investor are international property specialists, with a large portfolio of luxury investment properties around the world, as well as student accommodation investments in the UK.

Copyright 2015 © Peter Scully - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules