Payment of tax on rented property in UK when working abroad?

[MarillionFan]

Does anyone know what the situation would be regarding paying tax on the rent of your main property in the UK if you were living abroad?

If for example I moved to the US for the next two years and rented my house out in the UK do I pay tax on any 'profit' (ie. rent - mortgage+costs) as self assessment in the UK? If I'm paying US taxes how / what would I pay on income in the UK???

[doodab]

Does anyone know what the situation would be regarding paying tax on the rent of your main property in the UK if you were living abroad?

If for example I moved to the US for the next two years and rented my house out in the UK do I pay tax on any 'profit' (ie. rent - mortgage+costs) as self assessment in the UK? If I'm paying US taxes how / what would I pay on income in the UK???

It will depend on the tax treaty, usually your country of residence will require you to declare the income (so they can get your tax rate right) but you pay tax on the income in the country where the property is.

[northernladuk]

Adopt a donkey from your local sancturay, marry it and put the BTL in it's name. Open an account in the Mrs Donkey's name and have the money paid in there while you are away. When Mrs Donkey sadly passes away you inherit it all tax free. There are some other perks we won't go in to on an open forum. Tax evasion the Yorkshire way, they will never suss it I tell ya!

[kingcook]

Adopt a donkey from your local sancturay, marry it and put the BTL in it's name. Open an account in the Mrs Donkey's name and have the money paid in there while you are away. When Mrs Donkey sadly passes away you inherit it all tax free. There are some other perks we won't go in to on an open forum but anyway. Tax evasion the Yorkshire way, they will never suss it I tell ya!

[IR35FanClub]

You be better off selling it, and buying it back for 1/2 price in 2 years time in the current climate. If property prices were on't way up, then keep it and rent it out.

If you insist on keeping it - pay tax to HMRC as a non resident, then delcare it to US in your IRA return *(nothing to do with terrorists) and hopefully as UK citizens pay way more tax than those US, they'll take pity on you and not charge you any more due to having the double taxation treaty with the UK.

[Greg@CapitalCity]

Does anyone know what the situation would be regarding paying tax on the rent of your main property in the UK if you were living abroad?

Yep, it remains taxable in the UK, even if you become non-resident. Take a look at;
Income Tax when leaving the UK : Directgov - Money, tax and benefits

You may be able to get tax relief in the US for UK tax paid, but that depends on the double taxation agreement......plus US tax is a nightmare, so I can't even pretend to point you in the right direction on that one.

[jamesbrown]

You'll need to get professional advice on this one from a dual-tax specialist (not a regular accountant), but the upshot is that you'll pay tax in the US on your worldwide income and will be able to offset costs on the rental property and any taxes paid in the UK. However, that doesn't mean you'll have no additional federal income tax to pay in the US and most US states do not allow credits for foreign taxes paid (remember that US taxes comprise both federal and state taxes). Also bear in mind that, if you plan to retain any controlling positions in a UK company, this can greatly complicate your US taxes.