Overseas investment opens up a wealth of opportunities for the savvy investor, creating a situation where the world is your oyster. However, from frequent news stories about non-domiciles, and the negativity that can be directed against them, many people can be put off global investment, feeling it is too complex.
Income from overseas is classed as any interest from international savings accounts, dividends or interest from overseas companies and any income from rental properties you hold globally. For the purposes of HMRC ‘overseas income’ refers to anything from outside England, Scotland, Wales and Northern Island. Consequently UK territories such as Channel Islands and Isle of Man are counted as overseas for the purposes of taxation.
Investing overseas, whether in business or property, is not a tax dodge. You will still have to pay tax on any income earned, whether in the country of origin or the UK. Although you can usually receive Foreign Tax Relief on the smaller of the two sums.
In some rare cases, where no double taxation agreement exists between the UK and your country of investment, you may be eligible for unilateral relief, or you may have to pay both sets of taxes. Your local tax office or Independent Financial Planner can confirm which applies to you.
Any tax on overseas income is declared and paid through your annual tax return and there are several specialist funds who focus on the overseas market, helping you get the most of your investment. For unbiased advice on investing abroad, speak to an Independent Financial Planner today.