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Book review

How to Avoid Tax on Foreign Property

By Carl Bailey
Published by TaxCafe UK Limited (ISBN 978-1904608660)

There are few topics of more interest to landlords (or indeed anyone earning a crust!) than how to pay less tax, so this excellent book will come as a welcome, and authoritative, guide to anyone who owns property abroad or is thinking of doing so.

The author, Carl Bailey, is a qualified accountant who has specialised in tax issues for over twenty years, and as with other books he has written for the TaxCafé's series of books, his experience and depth of understanding are evident on every page.

The book takes a logical approach to the topic, explaining that it is written specifically for UK-resident readers and that for most of us, who are both resident and domiciled in the UK, paying UK tax on our foreign property is unavoidable. It also explains the situation for non-doms resident in the UK, reminding us (as if we needed to hear it again!) of how advantageous the tax regime has been for them until the Chancellor's recent budget, and what the current situation is for non-doms.

How to Avoid Tax on Foreign Property explains the basic principles of UK tax on foreign property (which is deemed as in the UK to be either investment or trading property depending largely on the speed at which property is bought and sold), and some of the idiosyncrasies in the Revenue's approach, which for example does not allow owners of property abroad to set their rental losses against rental profits in the UK.

Bailey goes into some detail about how UK tax is applied to rental income, trading in foreign property, capital gains realised on foreign property, the risks posed by foreign exchange fluctuations and how to hedge against them, double taxation relief, the specific case of non-doms and the advantages of emigrating to avoid UK taxation. The book contains some very useful advice on transferring assets to spouses and civil partners, avoiding tax problems relating to foreign exchange and electing main residence - all of which have the potential to save substantial sums in reduced tax for investors in foreign property.

The book covers the specific questions of whether to buy property abroad in your own name or via a company or other locally-available investment vehicles, and deals with popular destinations such as France, Spain, Italy, Portugal, Cyprus, Bulgaria and Dubai in some detail.
How to Avoid Tax on Foreign Property is well-written and clear, and provides invaluable worked examples that facilitate quick understanding
of the sometimes complex tax issues covered

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