Overseas property

If you live and pay tax in the UK then you must declare rental income from overseas rental properties on the foreign pages of your tax return.  The profit from the overseas lettings can be worked out in exactly the same way as for a UK property, however if you make a loss from the rental then this cannot be offset against profits from UK rental properties.

Another thing to consider is that if you live and pay tax in the UK then if you sell the property and make a gain then this will be subject to UK Capital Gains Tax.

If you do make profits or a capital gain then you may find that there is a foreign tax charge.  If this is the case then you will usually get some relief on your UK tax return for this, so that you do not end up paying tax twice.

The above assumes that the taxpayer lives and pays tax in the UK, however if you are not originally from the UK, or spend less than half of the year here then the tax situation can change.  The residency status of an individual is a complex area of legislation and if you have any queries concerning your liability to tax on overseas rental properties please consult your local TaxAssist Accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.