EXPATRIATES who rent out their homes in Britain could find themselves unable to benefit from their personal allowance if Chancellor George Osborne presses ahead with plans to force non-residents to pay tax on all of their UK income according to a report in the Daily Telegraph.
Currently, EU nationals and British expatriates can offset the income they earn in the UK from renting their properties against the £10,000 personal allowance.
The proposal to strip expatriates of their right to use their personal allowance has been released by the Treasury as part of its consultation process. If adopted, it would bring the British tax regime in line with those of the US, Canada and much of the European Union.
It’s been estimated that the change would affect in the region of 400,000 expatriates and bring the government a further £400 million a year in taxation and would include 175,000 people who live abroad and earn an income from property in Britain.
Jackie Hall, a tax partner at accountants Baker Tilly, said expatriates should consider selling their UK rental properties and reinvesting the money in shares or property abroad.
The changes to the tax regime, if implemented, could scupper the plans of some Britons planning to retire overseas, while others could be forced to return to the UK as they would no longer have sufficient income to support themselves.
The Treasury has been reported as saying that no decision has yet been made.
Author: Nigel Howarth, news.cyprus-property-buyers.com