Page 41 - Property Portfolio - August 2019

company receive the same inheritance tax Other costs
treatment on death as UK domiciles. This applies Buy-to-let tax relief continues to taper. Now
to all UK residential property of any value, landlords can only deduct 25% of their mortgage
whether occupied or let. interest repayments against rental income
(compared to 75% in 2017/18 and 50% last
year). From April 2020, the entire sum of
If this affects you, it may be worth considering
How much will a UK restructuring to avoid an unwelcome 40% interest payments will qualify for a 20% tax relief
instead.
inheritance tax bill as well as ATED liability.
However, no tax relief is available for ‘de-
property cost you in taxes? enveloping’ property, so take care to understand Do not forget to factor in council tax charges
and other expenses associated with owning UK
your options and associated costs.
property to establish its real value.
Stamp duty land tax
Only first-time buyers benefit from stamp duty Remember: if you are Spanish resident, your
relief; for everyone else, the £125,000 threshold worldwide real estate will be counted to assess
applies within England and Northern Ireland, your wealth tax liability here, so UK property
with rates up to 12%. could tip you over the threshold and increase
your tax bill.
A 3% surcharge applies when purchasing
additional UK residential properties, such as Establish your options
second homes and buy-to-let properties, bringing While many expatriates understandably want
the top stamp duty rate to 15% (for properties to retain property in the UK, the increasing
over £1.5 million). Overseas properties are tax liabilities need to be carefully considered,
included, so if you own a Spanish home and especially for second and subsequent properties.
buy another in the UK – even if it is your only
UK property – additional stamp duty may be British expatriates living in Spain can benefit
payable. from speaking to an adviser with in-depth
knowledge of the tax regimes of both countries
Instead of stamp duty land tax, Scotland and to ensure you hold all of your assets in the most
Wales charge transaction taxes on properties tax-efficient way possible. They can also present
over £145,000 and £180,000 respectively, with opportunities that may offer much better tax
a surcharge payable on second properties over advantages and returns than UK property.
£40,000 (Scotland charges 4%).
Tax rates, scope and reliefs may change. Any
It is expected that an additional 1% stamp statements concerning taxation are based upon
duty for non-residents buying residential our understanding of current taxation laws
property in England and Northern Ireland and practices which are subject to change. Tax
will be introduced in the near future. The UK information has been summarised; individuals
government is currently reviewing responses to should seek personalised advice.
its recent consultation on this.

Keep up to date on the financial issues that may affect you
on the Blevins Franks news page at www.blevinsfranks.com

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