oversees property ... buy to let.

andyn_3

I am interested in buying foreign property in Spain and probably also Florida, to hopefully gain in value and to rent out to holiday-makers ( I hope to cover some of the mortgage repayments in rental ). I assume that if I am paid rental in the UK in sterling, I would have to declare this as income and pay the full rate of income tax. However, if I have a foreign bank account, and get paid in Euros or dollars, am I liable to pay any tax. Also , am I allowed to bring any of this money back into the UK ( or transfer money from Spain to USA and visa versa ) without being liable to pay tax.
Also, what other taxation issues do I need to be aware of ??

thanks, Andyn.

Rafter

The inland revenue website should be able to help you with the rules on taxation of holiday homes and overseas property.

You may have to pay some tax locally too, although various tax treaties should mean that you avoid paying tax twice on the same income.

Taking payment in local currenty exposes you to currency risk, but depends what currency you are borrowing in.

US dollar decline means that US property is cheaper, although the dollar is expected to slide further.

R.

dunstonh

There is the potential to do this within a pension plan from 2006. The income would then be tax free and any gain in property value would be exempt from CGT. Additionally, there would be no IHT liability on the assets if you were to die.

We are awaiting information at this stage as to whether overseas properties will be allowed. Some say they wont allow overseas properties but others say European properties would be allowed.