Property abroad

Expats must declare any property abroad to the tax office.

The UK tax office has set up an investigative task-force to track down expats who haven’t declared overseas property. The team will “mine” publicly available online information to discover people who own land or houses abroad.

The UK tax authority (HMRC) has put together a team of 200 investigators. Their first task will be in look into owners of overseas property. They will focus on those who have failed to declare any rental income or capital gains.

A combination of the new online team and greater international cooperation between tax offices means fewer expats will be able to hide overseas assets. Peter Howarth, a former UK tax inspector, said “there is increasing transparency as land registry records and other public information is readily available on the Internet.

“We are seeing greater international collaboration between tax authorities. Treaties in place between European countries mean that the UK tax office can easily follow-up lines of enquiry overseas.”

In a twist to the story, within a European tax treaty any tax due in the UK can be collected in other countries. Of course this depends on the individual tax treaties. For example, if you live in Spain and have undeclared property there, when the UK tax office catches you, the authorities have the power to empty your Spanish bank account without a court order.

Howarth recommends that those expats abroad who are hiding undisclosed assets should declare them now. “If people do come forward the tax office is likely to accept their disclosure without further investigation.

“It’s better to resolve the position now than wait to be found out further down the line and face a much tougher penalty.”

Marie says:

I don’t understand.

If a person retains their British Citizenship, has moved abroad a number of years ago and owns property in the new country, do they owe tax back to the UK?

What is the situation where a UK expat owes tax back to the UK on property abroad?

Once a person leaves the UK for good, what do they have to declare back to the UK?

Is the UK in anyway similar to the US, in that they still tax citizens abroad years later after they have left their home country?

Thanks for any clarity.