It was recently announced that UK citizens owning foreign property in Dubai and other countries will be the target of tax investigators.
A specialist team of investigators are specifically searching for properties overseas where no tax has been declared on them.
During the boom era, thousands of British investors bought holiday homes and investment properties, worlwide. The UK’s chief secretary to the Treasury David Gauke is heading up the new unit.
He commented recently;
“The UK government is committed to tackling tax evasion and avoidance across all areas of the economy.”
The Affluent Unit
Dubbed “The Affluent Unit” it targets top rate tax payers of 50 percent alongside UK-based commodity trader residents who hold offshore investment accounts.Foreign properties let out with undeclared rents are the main focus. However, those who own foreign property that has never been let will also be asked to prove it to the HMRC. Owners will need to show any foreign bank accounts to demonstrate how they can afford to buy and maintain the property.
Tracing Owners For Tax
Some countries though don’t have a Land registry as we do in the UK, which could make tracking them more difficult. Dubai and Cyprus for example would be two such countries where tracing would not be easy. However, where one government takes the lead, others will surely follow, particularly in the cash strapped Euro zone, so it is likely that we will see more of these types of new tax rulings coming to the fore.
Protection From Excessive Tax
Owners of foreign property should be aware of protecting their tax affairs from the governments’ prying eyes. There are fully legal UK systems which don’t involve having foreign bank accounts, which can protect all assets and earnings from UK tax for the lifetime of owner and their beneficiaries. These robust systems are passed yearly by HMRC and have been in existence for over 20 years.