Good Reasons For Landlords To Become Non-Resident For Tax Purposes

by Mark Alexander

10:19 AM, 15th November 2017
About 2 years ago

Good Reasons For Landlords To Become Non-Resident For Tax Purposes

Make Text Bigger
Good Reasons For Landlords To Become Non-Resident For Tax Purposes

Did you know; if you become non-resident for tax purposes you only pay CGT on capital appreciation since April 2015 on your rental properties?

A few weeks ago I shared a tax planning strategy based on this (link here) and since then I have already been contacted by four landlords who are now residing in the Southern Hemisphere. It is good to know that Property118 now reaches UK landlords living all over the world.

In this article I would like to share an example of how big the savings can be.

Mr X has dual nationality and now lives in New Zealand. His London based property portfolio is worth £19 million and his acquisition costs were £6 million.

If he still lived in the UK he would pay tax on £13 million of capital gains assuming he was to sell today, the CGT bill on which would be a whopping £3,640,000.

However, he’s now obtained a professional value of his property portfolio backdated to April 2015 at £18 million, which is broadly in line with the HM Land Registry House Price Index for London. This means that for CGT purposes as a non-resident he would only pay £280,000 on tax based on the £1 million capital gain since April 2015.

That’s a tax saving of £3,360,000.

The good news is, even if you are currently resident in the UK, it isn’t too late to take advantage of this for yourself.

For example, if you become non-resident for UK tax purposes at any time before the end of March 2018 you will qualify for non-resident CGT rates from April 2018 onwards.

Just in case you didn’t already know, I took advantage of this back in Feb 2016 and became resident for tax purposes in Malta. You don’t need to live in Malta or New Zealand to benefit from non-resident CGT in the UK. You can live anywhere in the world except for the UK.

If you would like to discuss this further, and perhaps the rules on how much time you can then spend visiting the UK, please book a tax consultation with me via the button below.

Show Form To Book A Tax Planning Consultation

Form To Book A Tax Planning Consultation

Consultations include new client compliance checks, fact find via email with complimentary software, expert analysis, a detailed written report and recommendations and a 30 minute Q&A session via Skype or telephone. We GUARANTEE total satisfaction or a full refund.
  • Please provide an overview of your circumstances and what you are looking to achieve.


Comments

38% of landlords will consider selling up if Government scraps Section 21

Landlord incorporation and tax planning presentation

Landlord incorporation and tax planning presentation

Incorporation relief and latent gains explained

Incorporation relief and latent gains explained

Incorporating your property portfolio without having to refinance

Incorporating your property portfolio without having to refinance

Capital Account Restructure – Case Study

Capital Account Restructure – Case Study

Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

Stamp Duty when transferring the ‘whole business’ of a Partnership into a Limited Company

Software to analyse the viability of transferring a property rental business into a Limited Company

Software to analyse the viability of transferring a property rental business into a Limited Company

Inheritance tax and legacy planning for property company owners

Inheritance tax and legacy planning for property company owners

HMRC Internal Manuals ‘Landlord Incorporation’

HMRC Internal Manuals ‘Landlord Incorporation’

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

On-demand webinar explaining the uses of Limited Liability Partnerships “LLP’s” for landlord tax planning

Guide for landlords on forming an LLP for property investment

Guide for landlords on forming an LLP for property investment

Partnership taxation and associated rules

Partnership taxation and associated rules

Hybrid Tax Structure – Landlords BEWARE!

Hybrid Tax Structure – Landlords BEWARE!

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More