British expats unaware of potential tax benefits of being a non-UK resident

A recent study has identified that up to two thirds of British expats who have a rental income of £10,000 or less from property in the UK aren’t aware that they won’t owe tax in the UK on that income.

The survey, conducted by Find UK Property, made the finding after asking the question “‘Would you have to pay UK tax if you had rental income of £10,000 with no other UK income?”.

With rental incomes on the rise, and continued low interest rates the option of investing in a UK property to generate a decent return, the tax allowance opportunity could provide lucrative for expats who have savings but are tired of not receiving much of a return due to low interest rates.

While there are suggestions that the government may remove the tax allowance for expats, any changes are not likely to come into play until next year at best.

When questioned by our tax experts, even expats who were aware of the tax allowance in the UK, it is not uncommon for them to be unaware that they still have to complete a UK self-assessment – or that they may still be liable to pay income tax on their rental income in their country of residence.

Mike Foster, one of our experts and Director at Knight Hayes is helping expats shift the way they think about how expats should be planning their investment strategies. He explained, "What we are seeing is our clients are looking to diversify their overall investment strategies. Due to the large increases in values many are now receiving low yields. We are helping our clients increase their returns by tax planning and the repositioning of wealth."

If you receive an income from property in the UK, or are unsure of your full tax position, you should always seek advice from a qualified tax expert. Complete the form on the right and we will arrange for a free initial consultation.