Tax implications for owning property abroad: A guide for UK citizens

Euan Robb

Owning a piece of paradise in a foreign land is a dream for many UK citizens. Whether it's a sun-kissed beachfront villa in Spain or a quaint cottage in the French countryside, the allure of international property is undeniable.

However, the tax implications of owning property abroad can be complex and, if not managed correctly, costly. This blog post will demystify the tax requirements for UK residents with foreign property and introduce Equals Money's international payment service as an efficient solution for managing your finances across borders.

About Equals Money

Understanding the tax landscape for overseas property owners

When you purchase property abroad, you enter a multifaceted tax landscape that requires careful navigation. There are several tax considerations that UK residents must be aware of:

1. Income Tax on foreign property

If you're earning rental income from your overseas property, the UK's HM Revenue and Customs (HMRC) requires you to report it. The income must be declared on your Self-Assessment tax return, and you'll be taxed accordingly. However, the UK has double taxation agreements with many countries, meaning you may not be taxed twice.

2. Capital Gains Tax (CGT)

Selling your foreign property may result in a capital gain, which is taxable in the UK. CGT is calculated on the difference between the selling price and the purchase price, after adjusting for inflation and allowable expenses.

3. Inheritance Tax (IHT)

Your property abroad might be subject to UK IHT if you're domiciled in the UK at the time of your death. The threshold and rates for IHT are subject to current UK tax law, which considers the value of your global assets.

4. Local taxes

Apart from UK taxes, you must comply with the tax regulations in the country where the property is located. These can include local income tax, property tax, capital gains tax, and inheritance tax, which vary widely from one jurisdiction to another.

Tax planning and compliance

Effective tax planning is crucial to minimise liabilities and ensure compliance. Consider consulting with a tax advisor who specializes in international property. They can help you navigate the bilateral tax treaties and advise on how to benefit from them.

Equals Money: Streamlining your international property payments

Managing finances across currencies can be daunting and potentially expensive due to fluctuating exchange rates and transaction fees. Equals Money offers a comprehensive international payment service that simplifies this process for property owners.

Why choose Equals Money for your foreign exchange needs?

  • Competitive exchange rates: Equals Money provides competitive rates for over 140 different global currencies.
  • Faster settlements: With same-day and next-working-day transfers, we make sure your funds reach their destination when they need to.
  • Expert guidance: Our expert team offers guidance and support, allowing you to make informed decisions when making large cross-border payments.
  • Forward contracts: Currency exchange rates fluctuate constantly, and this can impact the amount your international payments will cost you in GBP. Equals Money offers payment solutions such as forward contracts that allow you to fix a current exchange rate for a payment or transfer up to 24 months in advance. This allows you to know in advance how much transfers will cost you in GBP and budget effectively.* You are committed to the rate you’ve booked regardless of how it moves after the fact, presenting a potential disadvantage in choosing a forward contract. However, many looking to make large global transfers find the stability offered by a forward contract outweighs this disadvantage.


Owning property abroad is an exciting venture, but it's essential to stay informed about the tax implications to avoid any unpleasant surprises. By partnering with Equals Money for your international payment needs, you can manage your property investments efficiently and easily.

Tax laws are subject to change, and individual circumstances can vary widely. It's always recommended to seek personalised advice from tax professionals.

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*Equals Money can only offer forward contracts to facilitate payments for goods and services.

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