Yes, you heard it right! If you want to become one among those and like to be a property investor in London then here are eight key points to get you started:
🔖 Stamp Duty Land Tax (SDLT):
SDLT is a tax paid when purchasing property in the UK. Different rates apply for residential and commercial properties, as well as for first-time buyers and additional properties. Make sure to factor this into your budget when purchasing a property.
🔖 Income Tax on Rental Income:
Rental income earned from UK property is subject to UK income tax. Non-resident landlords have different tax rules compared to residents. Non-residents may need to pay tax on gross rental income or have the option to pay tax on net rental income after allowable expenses.
🔖 Non-Resident Landlord Scheme (NRLS):
If you are a non-resident landlord (living outside the UK), you need to register with the NRLS. The letting agent or tenant usually withholds tax from the rental income and pays it directly to HM Revenue & Customs (HMRC) unless HMRC agrees that you can receive your rental income gross.
🔖 Capital Gains Tax (CGT):
When you sell a property in the UK, you may be liable to pay CGT on any profit made. The rate depends on various factors, including your residency status and the amount of gain. Principal private residence relief may apply if the property has been your main residence.
🔖 Inheritance Tax (IHT):
If you own property in the UK, it may be subject to UK inheritance tax upon your death. However, there are exemptions and reliefs available, and tax treaties between India and the UK may provide relief from double taxation.
🔖 India-UK Tax Treaties:
India and the UK have a double taxation avoidance agreement (DTAA) to prevent double taxation on the same income. Understanding the provisions of this agreement can help in optimizing your tax liability.
🔖 Structuring Investments:
Depending on your circumstances and investment goals, you may want to consider different ownership structures, such as owning the property individually, through a company, or via a trust. Each structure has different tax implications.
🔖 Expert Advice from OZGiAN:
Given the complexity of international tax laws, it’s important to seek advice from professionals who are knowledgeable about both Indian and UK laws. They can help you navigate the intricacies and ensure compliance while minimising your tax burden. Always keep yourself updated with ODFC on the latest regulations and seek personalised advice from OZGiAN tailored to your specific situation before making any investment decisions.
Email: 📨 ask@odfc.co.uk
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