I own a UK property but I am also an Isle of Man citizen. Will I still be liable to pay tax in the UK?

160 pts ?

The amount you owe in tax (I assume from rental income) is based on where the property is based. In this case, your property is based in the UK, and if you are earning rental income from it, you will be liable to pay tax on the income (which your letting agent may withhold) and capital gains tax (CGT) if you sell it. Read more here.
 
My article on changes to taxation for non-UK domiciled residents is relevant to your question, even though not directly: your residency status does not affect whether or not you will pay tax on property income or gains. Overseas property owners are now liable to pay tax on income and gains from property just as UK residents are. HMRC advises seeking expert property tax advice from an accountant or other tax advisor who deals with this area.
 
Rental income
 
I think you should seek advice specifically about how the new legislation affects how you report your rental income and gains ‒ whether they should apply for rental income without deduction of tax as part of the non-resident landlord scheme (NRLS) ‒ and how best to work within the new legislation. The new rules mean that just like a UK resident landlord you can claim expenses against the rental income and just pay tax on the profit. This is the breakdown:
 

  • You are legally obliged to contact HMRC if your rental income is less than £2,500 a year.
  • You are legally obliged to report income on a self assessment tax return:
  • £2,500 to £9,999 after allowable expenses
  • £10,000 or more before allowable expenses

 
If you are not already registered for self-assessment, you must register by 5 October following the tax year you received rental income. See more about paying tax on rental income and gains on the HMRC website.
 
Non-dom Capital Gains Tax (CGT) rates
 
Remember that if you sell your UK-based property, capital gains tax will be due on the gain. These rates are 18% and 28% depending on which tax band you fall into in the UK, e.g. if paying tax at the higher rate (40% or 45%) you will be liable to CGT at 28%. 
 
There is an individual CGT-free allowance (£11,100 in 2016/17), so only gains over that will attract CGT. However, a UK resident non-dom claiming the remittance basis will lose their entitlement to this allowance too.
 
You must see by now that this area is in a minefield for the unwary! Put simply, all overseas landlords and property owners must now pay tax on rental income and must pay CGT on gains on sale of the property. You can read more about all of this on the HMRC website.
 

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