A Place in the Sun Could Be Threatened by Tax Regulations
Tax regulations are threatening to strangle the growing popularity of overseas properties on the part of UK investors hit by the slowing domestic market, a Birmingham tax specialist has warned.
Gary Ashford, senior tax investigations manager at Grant Thornton, says investors should ensure they are fully aware of the tax implications of buying a property abroad.
'It's fair to say that, even though we are meant to be part of a common trading market in Europe, most countries have their own, sometimes idiosyncratic, tax laws,' he said.
'For example, a great number of European countries apply withholding taxes and wealth taxes.'
Some buyers use companies registered in tax havens to purchase their holiday home to reduce or avoid altogether some overseas wealth taxes.
'While this may be a perfectly legitimate planning tool, the Inland Revenue has, in the last couple of years, been very busy identifying individuals and companies with connections to tax havens as part of a project called the Offshore Arrangements Project.
'We have begun to see cases where individuals who have purchased a foreign property in this way are being subject to an in depth Revenue investigation. …