Taxation Liability

It is essential that an investor seeks and receives correct professional advice concerning all aspects of their UK investment.

The rules concerning residence and domicile for UK tax purposes are involved and complex and can have a very important affect on tax liability. Professional advice should always be sought concerning these aspects which may also determine how the asset is to be held.

Regardless of how a landlord is assessed under UK tax laws, tax on the rental income from a property can usually be reduced or even eliminated by taking into account administration costs, legitimate financing costs, maintenance and other allowable expenses.

Those investing in and letting property are now deemed to have a business of property letting, and valid accounts are required to be prepared under normal commercial accounting principles. When more than one property is owned, the income and expenditure of all properties is pooled together .

Overseas residents who acquire property in the UK must also be aware or the potential charge to Inheritance Tax which arises on all assets situated in the United Kingdom.

In addition to rental income, there may be other sources such as Interest and Dividends. The application of the provisions of a Double Taxation Treaty which the UK may have with the taxpayer's country of residence may help to eliminate or reduce their UK tax liability.