Table of Contents
Income Tax
Foreign rental income earned in the UK is subject to UK income tax. The rate of tax depends on the total income of the individual and whether any double taxation agreement applies. Generally speaking, income tax on foreign rental income is the same as for any other type of income.
Capital Gains Tax
Foreign rental properties are subject to capital gains tax when sold. The tax rate varies depending on the status of the owner. For example, individuals are currently subject to a tax rate of 18% on the first £11,700 of gains and 28% on any further gains above that amount.
Stamp Duty Land Tax
Foreign investors may also be liable for Stamp Duty Land Tax (SDLT) when purchasing property in the UK. This is a tax on the transfer of property and the rate of tax depends on the purchase price.
Inheritance Tax
Inheritance tax may also be applicable when foreign rental properties are transferred. The tax rate varies depending on the value of the property and other factors.
Additional Considerations
When investing in foreign rental properties, investors should also consider other taxes such as local taxes, taxes on income from the property, and taxes on capital gains from the sale of the property. It is important to carefully consider all the tax implications before entering into any investment.
For more information about taxes on foreign rental income and properties, it is best to seek professional advice from a qualified tax advisor.
