New UK tax Changes Unlikely to Dent Appeal of Buy to Let for UK Non-residents

Jan 07, 2016, 13:20 ET from Offshoreonline.org

LONDON, January 7, 2016 /PRNewswire/ --

As stock market volatility continues, expats might be well advised to stick with UK buy to lets 

Expats invested in major stock markets such as the UK FTSE, the Dow Jones in the USA or in Europe, the Dax will have seen largely static average investment returns over the past 12 months and in some cases a slight fall. Meanwhile UK property continues to power ahead as an investment category with the Halifax recently reporting a 10% rise in UK property values over the past 12 months, with London prices rising by up to 22%. That's good news for UK expat buy to let investors and expat mortgage holders, as interest rates on UK expat mortgages have continued to stay competitive, ranging from 3.53% to 4.24%, according to UK expat mortgage brokers, Offshoreonline.org.

Despite the gloom surrounding the recent changes in UK Stamp Duty for expat buy to let investors and capital gains tax changes which have impacted upon international property investors, there is much to still be positive about. A roundup of opinions amongst leading property experts including the Royal Institution of Chartered Surveyors (RICS), Rightmove, the UK's largest property portal, Reuters, BNP Paribas and the Centre for Economic and Business Research (CEBR) all predict another good year for UK expat buy to let investors, with forecast property price growth of between 3.5% and 6%, with most opinions clustering around the 4% mark. "Add to that a typical rental yield of 4%-6% and the market could be on course to deliver total returns of up to 10% again", said Guy Stephenson, a spokesman for UK expat mortgage broker Offshoreonline.org.

Those moving abroad or already invested in UK property from overseas will now have a new tax checklist, though, thanks to changes in the UK tax system which will impact upon expat buy to let investors and international mortgage holders. Going forward it will be even more important to keep records of amounts spent repairing properties, as this expenditure is still tax deductible against profits. Expat buy to let international mortgage holders will continue to be able to offset 100% of mortgage interest costs against rental income and then only pay income tax at the standard rate, currently starting at 20%. Importantly, UK expat landlords will also still benefit from a personal tax free allowance of £10,800 for the tax year from April 2016.

Other important changes which will affect expat buy to let investors and those with international mortgages include new capital gain tax rules. Going forward, UK property which is not designated as the main family home will now be subject to UK capital gains tax, although UK property investors will still have access to their own tax free capital gains tax allowance, worth £11,100 this tax year. Only gains above this are taxed. As with all matters surrounding tax, the advice is to take advice, as there are often still plenty of ways to mitigate any tax liability and stay within the rules.

For more information on expat mortgages, please visit http://www.offshoreonline.org

Note to Editors 

Offshoreonline.ORG is a UK based specialist expatriate and international broker offering advice on UK, French, Italian, Portuguese and Spanish mortgages. Offshoreonline.org is the website of Expat mortgages Limited, an FCA regulated entity.

Offshoreonline.org .org pioneered the concept of the discount broker in the expatriate market when it started offering no and low fee deals in 1998.

Overall, the company aims to bring high quality UK regulated broking services to UK expatriates worldwide in the areas of UK and euro mortgages.  The company is UK regulated by the FCA for credit broking business, giving offshore customers the reassurance that they are dealing with a reputable organisation.

 

SOURCE Offshoreonline.org