Thailand refurb tax deductable ?

by Readers Question

14:20 PM, 3rd May 2017
About A year ago

Thailand refurb tax deductable ?

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Thailand refurb tax deductable ?

I am an established U.K. landlord (not Ltd / incorporated)

If I bought a property in Thailand to “refurbish” to ad to my buy to let portfolio (thus to rent out the finished apartments) could I deduct the costs of the refurb. from my usual U.K. buy to let profits ?

I understand “not” with a new-build, but “yes” if its a refurb.
Hopefully some-one can advise me here.

Ronald



Comments

Neil Patterson

14:40 PM, 3rd May 2017
About A year ago

Hi Ronald,

Tax on income from overseas property is worked out in the same way as property in the UK.

However, for tax purposes, a UK property business and an overseas property business are effectively separate entities.

The profits and losses of an overseas property portfolio cannot be combined with the profits of a UK portfolio. They are taxed separately so it is not possible to set the losses from one against the profits of the other.

Please do not take this as advice and you should consult your accountant.

Ronald Crane

23:08 PM, 3rd May 2017
About A year ago

Reply to the comment left by "Neil Patterson" at "03/05/2017 - 14:40":

Seems like a contradiction here as you say as I,m a U.K. citizen I would pay U.K. tax on profits from U.K. or abroad, (thats what I think) but you then go on to say that my U.K.and abroad interests would be taxed separately?? How could they be taxed "separately"?
I repeat, its my understanding that wether its home (U.K.) or abroad, a U.K. based person comes under the U.K. tax umbrella BUT can deduct expenses / costs from a foreign venture if the said venture is a REFURB. (not a new-build),
Would you say that is so ?
Many thanks
Ronald
Buy-to-let landlord

Dr Rosalind Beck

12:16 PM, 4th May 2017
About A year ago

Reply to the comment left by "Ronald Crane" at "03/05/2017 - 23:08":

Hi Ronald. You seem to know it all already, so I wonder why you have asked for advice. In fact, I know that many countries would state that you must pay tax in their jurisdiction if that is the location of your properties and business. You should check with the Thai tax authorities if that is the case. I doubt that many people here will have that specific expertise.

Ronald Crane

13:57 PM, 4th May 2017
About A year ago

Reply to the comment left by "Dr Rosalind Beck" at "04/05/2017 - 12:16":

Thank you for your views but I feel my question goes un-answered.
As a buy-to let landlord in the U.K. I believe I can put "refurbishment" cost against my profits but NOT for any "newbuild" costs.
Question is, can I legally deduct "refurbishment" costs from from my U.K. profits,
if the buy-to-let refurb. venture was abroad and funded by me from the U.K. ?
Thank you for helping me.
Ronald
U.K. landlord

Claire Smith

16:00 PM, 4th May 2017
About A year ago

Your UK and non UK profits are calculated separately. You cannot set a loss for one against the profit for the other. Losses would have to be carried forward against future profits of the same business (i.e. UK or non U.K.). If both UK and non UK properties make a profit, the calculation will be simple but they do need to be shown separately on your tax return.
You will also need to check on the tax rules for Thailand to ensure that there is an agreement with the UK that you are only taxed in one country and not in both. The following site suggests that you are only taxed in one county, but please confirm before acting.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/507424/uk-thailand-dtc180281_-_in_force.pdf
I would recommend that you speak to an accountant to check on all this - I am not qualified to give financial advice and am just speaking from my own experience.

Robert M

14:19 PM, 8th May 2017
About A year ago

The advice already given is correct in that a UK resident is taxable in the UK on word wide income. In that respect your income is added together. However, in calculating your total income there are rules about loss offsets and a loss on your foreign property cannot be set against a profit on your UK rental business. This stops dubious claims for holiday homes. Look to the relevant tax treaty to see if you would be taxable in Thailand on any profits there.


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