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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My married son is resident, and works, in Shanghai and wishes

Resolved Question:

my married son is resident, and works, in Shanghai and wishes to buy a buy-to-let of £207k in the uk. He has a uk bank a\c plus a bank a\c in IOM and has been offered a mortgage of £117k by Bank of China based on rental of £950pm. He pays tax in China on his Yuan earnings there of approx £50k and has no other source of income.
What is the most efficient way to deal with the tax situation on this proposed UK property.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Setting up a limited company is more viable if you a have a portfolio of properties.
LTD companies pay CGT at Corporation tax rates but do not get annual exemption against capital gains whereas individuals get annual gains allowance (equivalent to personal allowance) and the rest of the gain is chargeable to CGT.

Income from property in this country is taxable here, whether you reside in the UK or live abroad.

My advice would be to consider buting the property as an individual and not through a LTD company and pay tax on the net rental income to HMRC.
As a UK National he would be entitled to his personal allowance for income tax purposes as if he was resident here.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

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