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Overseas buy-to-let

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    Overseas buy-to-let

    I'm probably going to invest in some overseas property in my wife's country of origin. The banks over there seem quite keen to loan us the dosh. Are there any accounting gotchas to doing this? From what I can glean on the HMRC site any rental income is taxable in the UK but interest payments can be deducted first.

    #2
    How can we anwser this question if we don't know where 'there' is.

    The general taxation rule is that the country that the income is earnt in, has first call.

    You will first be taxed on rental income in the country that the property is situated. You when will then be taxed upon it again in the UK subject to double taxation relief.

    Some countries have very strange rules about taxation of rental income as they don't like to see local house snapped up by foreigners. (And other countries couldn't give a sh1t)

    HTH

    tim

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      #3
      IANAL but... Whose name the property is in may also make a difference. If your wife is still a foreign domicile then overseas income will be taxed in her country of origin, whereas UK domiciles are taxed on their worldwide income.

      Comment


        #4
        Originally posted by tim123
        Some countries have very strange rules about taxation of rental income as they don't like to see local house snapped up by foreigners. (And other countries couldn't give a sh1t)
        Any ideas how easy buy to let is in Sweden?

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          #5
          Sweden - god bless

          Its possible in Sweden but in general only for a short while (IMHO). With its socialistic background society frowns on one person making money out of another one for something that is primarily a basic right - housing. I lived in Stockholm and there buying property can be a nightmare unless it is a house rather than a flat.

          For a flat you have to get the approval of the "Foregningen" to rent it out - in my case I had to prove that I been asked to work abroad (coming home to the UK) to get their approval. Admittedly it was more complicated for me since I was sub-letting and didnt own!

          In addition, have you thought about the amount of tax you would have to pay?

          Bottom line: consider somewhere else. I love the place, had a wonderful time there and have many great friends there who I see about 2-3 times a year but it certainly is no tax haven!!

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            #6
            >but it certainly is no tax haven!!

            And if you like a beer, forget it. If George B had lived in Sweden, he'd have run out of cash years before his liver gave out.
            His heart is in the right place - shame we can't say the same about his brain...

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              #7
              And if you like a beer, forget it.
              That comment needs qualification: If you like to consume a lot of beer forget it, beer is expensive, but if you like to consume a dizzying array of different types of beer from all over the world then it is the place to be. I recon you could go in an offy and get a different beer every night for a year, or more (if you could afford to do that).
              Insanity: repeating the same actions, but expecting different results.
              threadeds website, and here's my blog.

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                #8
                Originally posted by Alexander Coe
                Any ideas how easy buy to let is in Sweden?
                It's not. Rents are regulated and you are *not* allowed to make a profit.
                If you do the tenant can complain and you have to give back the money you have 'stolen' from him.

                Being anything other than a social landlord is a non started.

                HTH

                tim

                Comment


                  #9
                  Not too much has been said about domicile. There might be some savings available if your wife is not UK domiciled [generally her domicile from a UK perspective will be that of her father, but she may have acquired the UK as a domicile of choice]. If she is not and the income is not remitted to the UK then it is not chargeable to UK tax. Of course the allowances are not available either.

                  The income will b taxable under the rules of the host country (who may or may not seek to tax it). It is also assesable under the UK regime (which will lead to taxation save for the above).

                  If there is a DTA between the UK and the host country then you should be able to get relief of the amount paid to the host country (although if you wife is not domiciled you won't because it has not been charged to UK tax)

                  http://www.hmrc.gov.uk/pdfs/ir20.htm#domicile

                  Comment


                    #10
                    Thanks for the replies.

                    laying aside the renting aspect - does anyone know how tricky buying out there actually is as a non Swede?

                    My Girlfriend is from Ystad in the very south (about half an hours drive from Malmo) and has family there, although she is now officially a 'foreign Swede' as she's lived away for so long...

                    I'm considering buying out there as an investment and obviously renting it would help cover the costs, but I'd be betting on making money from the value of the house/flat rising rather than really profiting from renting it out.

                    Comment

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