LAST week we looked at areas where a property investor could look for capital appreciation. The answers were that the fundamentals were certainly in the US, Canada, Australia and Britain. This week we focus on one of these countries in order to emphasise the need to use an adviser approved by the Securities and Futures Commission.
In Britain, a very popular market for Hong Kong money, there are four main taxes to watch out for: stamp duty, income tax on rent, capital gains on the eventual sale, and inheritance tax should you die while owning that property.
Stamp duty is payable on the purchase of properties and is unavoidable unless the cost of that property is less than GBP60,000 (about HK$690,000), in which case there is no stamp to be paid.
Income tax is chargeable on the income derived from that property (rent) if it is greater than the cost of owning that property. Worth noting here is the fact that even though one is not resident in Great Britain, landlords receiving rent from UK properties are allowed to offset that rent (income) against their personal (zero per cent) allowances.
Indeed, all Commonwealth citizens (Hong Kong, non-resident British, Australians, Canadians, etc) are allowed to claim their zero per cent allowances against rent received. A typical example might be as follows: Rent received at GBP1,000 a month equals GBP12,000 a year.
The following deductions may be legitimately claimed against that income: Wear and tear (on furnished accommodation): GBP1,200.
