If you are a UK resident and own a property overseas...... How do the UK Inland Revenue know about it if you dont declare it ? If you complete a tax return in the UK and say nothing about the property you own, will it be found out ? Does the country where the property is, automatically inform the UK authorities when you complete a mortgage and purchase of real estate in their country ? or is it purely down to the individual to declare it ?

thank you

Hi
I think it all relates to if you rent your apartment. Not declaring rental income is just like not declaring any other income. Not sure how this can be traced, personal view would be, if you declare it you have nothing to worry about.

not a tax accountant. if bought the rental income back to the uk, you will need to declare it. But if you kept the money oveases it should not be a problem.

In the UK all income you make whether from the inside the country or abroad must be declared otherwise you run a bit of a risk with the inland revenue.

but depending on where you invest it is possible to find a legal way around it, for example if you are investing in Dubai it may be a good idea to open an offshore company in one of the freezones, and assign a property to that and yourself as directors. This lets you open up an offshore account for the company and means ultimately you can save on taxes. Although be aware that any income brought into the UK as dividends, wages, from the company may incur taxation.

But its best to speak to your accountant on the taxation front just to make sure what ever approach you opt for is legally sound.

Firstly I am not an Accountant, however I can only speak on behalf of property investment in Europe. Under EU law it is now mandatory that the authorities within Europe notify the inland revenue department of any and all properties in your name or a company name, therefore I would highly advise you to pay the relevant taxes obviously with the deductions you are entitled to ie: if you have a mortgage on the property lets say for argument sake in Spain, you are entitled to 70% mortgage LTV, of of this 70% you can claim a propotion of the 1% annual wealth tax of the Spanish mortgage against the property. Also many purchasers who invest in Spanish property or purchase a Spanish property for holiday purposes and have no intention of renting the property out at all, these properties still carry an annual tax rental bill as the Spanish government deems that if a foreigner can afford a second property they should pay tax on rental income regardless if the property is being rented or not. Therefore when it comes to any type of property acquisition in any country within the EEC I would definately make sure you utilise a good accountant, to save you any problems in the future by trying to avoid the tax man or paying dual taxes.

Yes you should declare income, however exactly the same as in the UK you can offset several costs against the income. The reality of renting out overseas is that it is normally a breakeven venture rather than money making so the chances are tax wont be payable.

Bigger questions the taxman will ask is. Where did you get the money to buy it, ithe deposit money, installments etc

When we were resident in the UK (we've recently moved to Australia) Inland Revenue knew we had property in Oz as well as the UK, and we paid UK tax on our properties in the UK, and Oz tax on our properties in Oz. Yes we had 2 lots of accountants and 2 lots of tax returns. Now we have left the UK we will still be doing 2 lots of tax returns!

I like to sleep soundly at night so I do everything legally. Maybe because I've known people who have tried to withhold info from the tax man and almost lost everything.

Regards,
Karen

You only have to declare it if you have an income from it, as stated previously on this thread.
I know this as this is the info my accountant gave me when I enquired about it,however some countries do have an agreement with the uk,where you can pay your rental income tax in any of the countries you may have investments in or you may pay it to the inland revenue in the u.k

Well we declared it in Australia when we were UK residents even though we made a loss some years and now we've moved to Oz we have a big tax credit. We probably won't have to pay tax for the first year or so. I'm not sure if the same thing would happen if we hadn't moved to Oz.

Regards,
Karen