The Sunday Times - Money
If a return has been filed, officials will check whether household contents have been included as well as the value of the property itself. They will also investigate whether the foreign surveyor has undervalued the property.
Accountants also warn that British people who own property abroad through an offshore company also need to beware of the UK tax authorities.
In popular destinations such as France, Spain and Portugal it has been common to use offshore companies to avoid local taxes and inheritance laws. But the Revenue recently said homes owned by UK residents through a company structure may be taxed as a benefit in kind. The charge would be based on an assumed value for the property, and can run into thousands of pounds. If you want to avoid the tax, seek specialist advice from independent solicitors.
Accountants say it is easier to escape capital-gains tax on your assets by moving abroad because it relies on the more flexible concept of residence. You may be able to apply for tax residency overseas if you stay there for more than six months a year. You then pay local rates on most of your worldwide profits.
A popular ruse used by taxpayers about to make a large profit, say through the sale of a business, is to move overseas for several years. It used to be possible to do so for only a year, but now there is a minimum of five years.
It is not even necessary to move to a tax haven like Bermuda or Dubai; Canada and Australia are also potential destinations, because of the way taxable gains are calculated. Your gain is based on the difference between the value of the asset when you became resident and the value when it is sold. If you sell soon after you become resident, there will almost certainly be no tax to pay.
If you are retiring overseas, there are plenty of countries with low local taxes on profits and overseas income. Several Asian and Central American countries, such as Malaysia, Belize and Panama, have created tax and residency breaks to attract affluent tax exiles.
Dubai, where there are no taxes at all for individuals, is also keen to attract wealthy residents from overseas.
Accountants also warn that British people who own property abroad through an offshore company also need to beware of the UK tax authorities.
In popular destinations such as France, Spain and Portugal it has been common to use offshore companies to avoid local taxes and inheritance laws. But the Revenue recently said homes owned by UK residents through a company structure may be taxed as a benefit in kind. The charge would be based on an assumed value for the property, and can run into thousands of pounds. If you want to avoid the tax, seek specialist advice from independent solicitors.
Accountants say it is easier to escape capital-gains tax on your assets by moving abroad because it relies on the more flexible concept of residence. You may be able to apply for tax residency overseas if you stay there for more than six months a year. You then pay local rates on most of your worldwide profits.
A popular ruse used by taxpayers about to make a large profit, say through the sale of a business, is to move overseas for several years. It used to be possible to do so for only a year, but now there is a minimum of five years.
It is not even necessary to move to a tax haven like Bermuda or Dubai; Canada and Australia are also potential destinations, because of the way taxable gains are calculated. Your gain is based on the difference between the value of the asset when you became resident and the value when it is sold. If you sell soon after you become resident, there will almost certainly be no tax to pay.
If you are retiring overseas, there are plenty of countries with low local taxes on profits and overseas income. Several Asian and Central American countries, such as Malaysia, Belize and Panama, have created tax and residency breaks to attract affluent tax exiles.
Dubai, where there are no taxes at all for individuals, is also keen to attract wealthy residents from overseas.
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