Let Nedbank Private Wealth help you understand the tax implications of buying a UK residential property for your estate planning purposes.
Estate planning involves planning and managing your assets both during and after your lifetime. During your lifetime, it is about ensuring that your assets are structured optimally to protect your wealth against events such as divorce or death. But what happens after you pass away? How do you ensure that your assets are administered efficiently and that your dependants benefit the way you intended? This is where proper estate planning is essential.
If you own immovable property, this is one of the assets that must be provided for in your estate plan. In addition, owning property in another country, such as the UK, means the taxes and costs of the property may be different than what applies in the local market. This makes it even more important to make informed decisions when you buy the property.
Focus on the UK – there have been several changes to the way UK residential property is taxed in recent years
The table accessed from the link below, compiled by Marcus Prevel, Director of Nedgroup Trust Limited (Guernsey), shows what non-UK residents must consider when planning to purchase a UK residential property. Please note that not all the provisions below apply to UK commercial property (eg retail spaces, businesses, industrial) – it does however relate to residential premises that are commercially let.
Costs and charges you need to consider when purchasing a UK residential property
The following list summarises the costs and charges set out in more detail in the table:
The provisions below set out the UK tax consequences but not the South African tax consequences
South Africa has a residence basis of taxation, which means South African residents are taxed on their worldwide income in South Africa. There are however tax agreements in place between South Africa and other countries that need to be considered to determine which country has taxing rights.
Please note that the information in the table is a guide only
The table is for illustrative purposes only and should not be used as a basis for purchasing a UK property without first getting professional advice. If you own residential property in the UK or are interested in buying property, speak to your relationship manager who can put you in touch with the relevant tax specialists.
Download the table (PDF format):
Tax implications of buying UK residential property as a non-UK resident
Click on the links below to view the other articles online:
International > read more
The changing regulatory environment – no place to hide
Trusts > Read more
Tax consequences for South African residents involved in international trusts
Wills > Read more
Owning assets in a foreign country – is there a need to have a separate will?
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The Fiduciary Focus Newsletter is intended for general information purposes only and should not be construed as tax, legal or accounting advice. This communication is based on our bona fide interpretation of legislation, rules, regulations and publications. Nedbank Private Wealth provides estate and tax planning advice; however, we do not provide tax, legal or accounting advice and you are requested to consult a professional tax advisor or professional in this regard.
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