What kind of taxes for a foreign company buy property in UK?

[maxima]

thank you

[taxguru]

What if I had a EU company (and I was a director and sole owner) and it invested in a property in the UK and I lived there permanently...

Would it attract tax on the capital brought across the border?

You might want to have a look at the following:

1. If your company is non-UK resident, then you as its owner shouldn't be UK resident, to make it tax-efficient.

2. Following on from 1 above, your non-UK resident company will pay income tax on its rental income in the UK @20%. If the company sells the property, as of now there is no CGT, but there is a proposal to tax it, effective April 2015.

[maxima]

its a whole way around.. the funds might be generated in US, taxed in EU (in lower tax country) by the company in question and then used to buy the property in the UK precisely for the purpose of not paying UK (higher) tax. And then letting me live there. So its not offshore scheme.. Just am trying to optimize tax.. Am I wrong in assuming this might work ?

[Clare@InTouch]

Thanks guys.. I was thinking of paying a modest salary and accumulate the capital gains elsewhere outside the UK... would it avoid remittance claim (I am not sure I know what it is though )

But my main concern was - taxing the capital used to buy the house.. not what will happen with my income etc.. I might live in it 180 days a year for example and be non-resident or some other ways..

this is pipe dream stage yet not a plan

If the original source of the funds is in the UK then it'll already be taxed in the UK, so there's no option to keep it offshore and away from UK taxes.

If the funds are generated from an offshore source, kept offshore, and you're not UK tax resident they won't be taxed here. Unless you use them to buy a UK property, in which case you'd be bringing foreign income into the UK (remitting it) and it most likely would be taxed.

The rules around tax residency are complex, so get advice whilst you're at planning stage to ensure you take the necessary steps now for the outcome you want.

[Bobb]

Thanks guys.. I was thinking of paying a modest salary and accumulate the capital gains elsewhere outside the UK... would it avoid remittance claim (I am not sure I know what it is though )

But my main concern was - taxing the capital used to buy the house.. not what will happen with my income etc.. I might live in it 180 days a year for example and be non-resident or some other ways..

this is pipe dream stage yet not a plan

[ASB]

Check out the stamp duty that is payable. And the annual supplement that can be payable because it is company owned. Then there is the bik that is likely assessed on you and taxed as income. Then there is the question of whether the eu company becomes uk resident and taxed on its income.

some or all of the above are likely depending upon your and the companies exact circumstances.

[Clare@InTouch]

Depends if you're tax resident here, and whether you're claiming the remittance basis for foreign income. If you are, then buying a property counts as a remittance so you would be taxed on it.

[maxima]

What if I had a EU company (and I was a director and sole owner) and it invested in a property in the UK and I lived there permanently...

Would it attract tax on the capital brought across the border?