A question we are often asked is “What is the Tax treatment of money coming from abroad by Non-UK residents buying property in the UK?”
The short answer is that non-UK income and gains received by a non-UK resident are not subject to UK tax and the act of bringing non-taxable funds to the UK does not make them taxable. They are, for all intents and purposes, ‘clean capital’.
What happens if I become a UK Resident?
Once you become UK resident, HMRC will tax your worldwide incomes & gains on an arising basis but if you consider yourself non-UK domiciled, then you can elect to be taxed on the remittance basis for that year.
What is ‘remittance basis’?
On the remittance basis, you would be taxable only on UK source income & gains arising, and foreign income and gains remitted to the UK during the year.
Crucially, a remittance of funds comprising foreign income that had arisen in a year during which you were non-UK resident would not be a taxable remittance.
What other questions do I need to consider?
There are many other things to consider such as:
- Structuring overseas bank accounts to segregate future income and gains from the clean capital to allow the untainted funds to be remitted
- How to manage unrealised capital gains before possibly becoming a UK resident
- Maximising the amount of clean capital so that it is not subject to UK tax regulations
- Can you claim Business Investment Relief on the money you are bringing in to the UK perhaps for commercial purposes?
How do you get in touch?
We have many years’ experience helping clients with the whole subject of Non-UK Residents buying property.
Please get in touch as we would love to offer you a FREE ‘no-obligation’ 90 minute consultation.
You can arrange this consultation by calling 0203 755 2863 or emailing by Contacting Us Here