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bigduckontax, Accountant
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I am a UK tax paying citizen. I currently am tax registered

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I am a UK tax paying citizen. I currently am tax registered in the UK as I have a buy to let property there. I am however currently residing in Quintana Roo,Mexico. I specialise in digital art. I want to start providing online consulting sessions for artists.
My question is, because the work is online can I claim this work as a sole trader alongside my buy to let tax return?

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

You could, but it would be of little use to you as any losses made on a buy to let can only be carried forward against buy to let profits and no losses on your consulting business can be offset against buy to let profits. There are a couple of ways you could reduce your buy to let exposure:

  1. You could place your property portfolio in a limited company structure. You would then pay corporation tax (which is lower) rather than income tax on your profits. A drawback is that your mortgage options will narrow as fewer providers will lend to a company.
  2. If your spouse pays a lower rate of tax, you could transfer ownership of one or more properties to them (taking care this does not lift them into a higher tax band).

Otherwise you re in a cleft stick.

I am so sorry to have to rail on your parade.

Customer: replied 1 year ago.
Ok that's useful. The main thing is that I wanted to pay tax in the uk and not have to get involved in the Mex tax system if poss. I have been residing in Mex for the last year and a half.
I know that there would be a problem if I was selling and shipping paintings or physical objects from Mexico. But as it's online consultation I want to keep it uk based. I believe I can then just register as a sole trader when the time comes to declare any profits?
I have a correspondence address in the uk that I use.

International Living have the following pertinent advice on Mexican taxation for expats:

'As an expat in Mexico, the taxes you’ll pay depend in part on your situation. If you own property in Mexico you’ll have real estate taxes. If you rent out that property or own a business, have a job, or have interest-bear­ing bank accounts, you’ll owe income tax. Even if you have none of these, you’ll still pay sales tax at shops and value-added tax when you eat out at restaurants.

It’s a good idea to meet with an international tax specialist before you move to Mexico; he or she can advise you on how to best minimize your tax obligations, especially if you have significant assets in both Mexico and your home country. If you do business in Mexico, you’ll also want a good tax advi­sor there.

Income tax in Mexico:

You will owe income tax in Mexico if you hold a job, run a business, rent out a property you own, or hold an interest-bearing bank account or security in Mexico. In most cases you will need to file a Mexican tax return.'

You could register as self employed for your on line business in the UK using your accommodation address. HMRC will then send you a self assessment tax return to complete annually at the conclusion of each tax year. This return can alternatively be filed on line.

In any event there is a Double Taxation Treaty between the UK and Mexico which precludes the same income stream being taxed in both jurisdictions. This is achieved by means of tax credits, the tax paid in one country being allowed as a credit against any liablity in the other on the same income. The Treaty does not, however, protect you from differences in rates of taxation.

I do hope that you find my reply of assistance.

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Thank you for your support.