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Old 25.06.2018, 10:50
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Investment in London, UK property?

Hi

I have inherited a property in the UK and was wondering how income tax will work on letting it out. I will get something like 1500 a month from the property and was wondering how this will be taxed? I have been looking at this salary calculator to try work it out but still not sure. I've noticed others asking tax-y questions here so I've joined hoping for an answer. Thanks!
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Old 25.06.2018, 12:21
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Re: Investment in London, UK property?

To my understanding (I don't own a property):

You need to pay wealth tax on your international wealth (so for your property, the equity you own in it minus any debt).

For rent, you need to declare it as income and will be taxed as normal, as you are from your salary.

I don't know if there needs to be any tax paid in the UK or if it's only Switzerland.. I'll let someone else go into that
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Old 25.06.2018, 12:49
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Re: Investment in London, UK property?

You can deduct maintenance cost for that and also interest payments on the mortgage.
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Old 25.06.2018, 13:09
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Re: Investment in London, UK property?

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You can deduct maintenance cost for that and also interest payments on the mortgage.
It's unlikely an inherited UK property would come with a Mortgage, if it is subsequently mortgaged not all the interest is deductible for a higher rate tax payer as Rent is now added to income first & this will make many lower rate tax payers into higher rate tax payers. There is also a UK personal allowance of 11500, so on a rent of 18,000 the tax is likely to be under 1300 if no other UK income.
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Old 25.06.2018, 14:24
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Re: Investment in London, UK property?

I just sold the last of my properties in London recently, which were rented out so I do have first hand experience of this:

I assume you're a Swiss taxpayer and renting the property in a private capacity?

Your rent will be subject to a UK withholding tax which will be retained by either the rental agency or the tenant and handed over to the taxman. However you can apply to HMRC to have this payed gross. If they agree you can show this letter and receive the rent gross.

It is not guaranteed you will receive the personal allowance as you're not UK resident, you will have to negotiate that as well.

You will then pay tax at 20% after all deductions (including a personal allowance if granted) for maintenance, agency fees, advertising etc.

You will also have to register online as a UK taxpayer.

You will not be taxed on this income by the Swiss as they do not regard foreign real estate income as this is now taxed in the country where the real estate is located.

If you do rent then i would use an agency (I did) who will take a commission but make sure to add insurance in case the tenant defaults. They will also hold the deposit for you as that needs to be held in a special segregated account.

Finally, calculate the real return, including voids and maintenance, and see if you're not better off selling the property and investing the money in a portfolio of shares or even in Swiss property instead.
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Old 25.06.2018, 17:04
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Re: Investment in London, UK property?

As LuganoPirate mentioned in former post, you will not be taxed on this UK income by the Swiss authorities but you need to mention it in your tax declaration and they take it for the tax rate.
It is right that foreign real estate income is taxed in the country where the real estate is located.


In all cases your UK income (rental income) and your UK wealth (property) is part of your Switzerland tax declaration.
The amounts of UK income and amounts of UK wealth will increase the tax rate which will then be applied on your Switzerland income and wealth.
UK rental income and UK wealth amounts are not be taxed.
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Old 25.06.2018, 19:39
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Re: Investment in London, UK property?

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It is not guaranteed you will receive the personal allowance as you're not UK resident, you will have to negotiate that as well.
Currently your legally entitled to it, there was talk of ending it for non residents however it never got passed into the finance act. Edit
U.K. taxation is self assessment there is nothing to negotiate.

Last edited by fatmanfilms; 25.06.2018 at 19:50.
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