Step: New tax rules are very good news for overseas property investors
Changes in income tax rules for Britons investing abroad have been welcomed as "very good news" by an industry body.
The Society of Trust and Estate Practitioners (Step) has claimed that thousands of overseas property investors in places like Spain and France could stand to gain from the tax changes, which will exempt many foreign homeowners from having to pay a "benefit-in-kind" tax.
Previously, Britons who set up a company to run their foreign property as a means of avoiding "forced heirship" rules found in some countries were liable to pay a benefit-in-kind tax charge.
However, changes in the last Budget specified that HM Revenue & Customs will no longer seek to collect tax from individuals who own a company where a property is the only asset - so long as company activities are limited to that property, without being funded by any other connected firm.
John Riches, deputy chairman of Step, commented: "This is very good news for the thousands upon thousands who have bought a place in the sun because they will be free to own the property via a company without UK income tax risk."
Recent changes in Spain to foreign property tax law have meant that non-resident property investors will be able to pay the same capital gains tax rate as residents.
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