Can Someone advice me on whether or not I need to pay tax on UK property while living overseas?

Hi,
I have a property in the UK that collects rental money to a UK account. I moved recently to Fiji and have residency in Fiji now. I wonder if I need to pay taxes on the property in the UK or if there is a structure I can set up that avoids the tax legally? or does anybody now who to go to for advice?

Yes you need to pay tax on it, as the property is in the UK and generates the income. Your income is tax free if its earned outside of the UK. In the UK, it is taxed.

The only way to avoid any tax obligation would be to transfer ownership of the property to a company structure. But if you have a mortgage, this is unlikely to be acceptable by the bank, so isn’t an option.

The other way would be to minimise your tax obligation - by recording rent income, against mortgage interest, property upkeep, fees, bills, etc etc. Whatever is left is your profit - but you have a personal tax allowance of around £11K, so you would only need to pay tax on the portion of profit above that amount. You’d do this via Self Assessment with HMRC. I think the rules around what can be claimed for rental properties changed fro the 16/17 tax year, so you’d want to read in to that more (or keep all your receipts and then speak to an accountant).

Thank you so much, this is a great help! Does “a personal tax allowance” mean that if I earn under 11K I don’t need to pay tax? and is there a particular website I can find the tax changes for 16/17 or an accountant you could refer?

Exactly. So if you earn £8K through rental profits, you would have zero tax obligation.

For 2016/2017 the personal allowance is £11,000 per year, rising from £10,600 in 15/16 - Link.

Give http://www.taxdoctor.co.uk a try - its fixed fee self-assessment accountancy - they can advise, sort out your accounts and submit to HMRC, I think price is £99 + VAT, so a great price.

Thank you so much! This is a huge help!!

Remember that even if your earnings are below the threshold you still have to declare everything. then they will tell you you don’t owe any tax, but do declare it.