Hi community, I was hoping to get some advice regarding any tax liability I may face from having an IP in the UK. I am considering purchasing something in England and have spoken to a Tax Accountant there about the best structure in England for tax purposes. The feedback given was to set up a company and pay dividends to shareholders if/when you want to distribute funds. What I am particularly interested in is whether there are any tax implications for me in Australia that I should be aware of and whether there is anything I can do/set up to minimise my exposure? Cheers!
Will need to consider the CFC (controlled foreign company) rules As the UK is a listed country will need to determine if rental income is attributable income for CFC purposes
Yes there are. You are taxed on your world wide income. Controlled foreign companies included with some very complex laws you should expect to pay $5,000 upwards for this sort of advice. I won't advise on this area because of its complexity
Legal advice on the Australian implication (and to a lesser degree, tax) should be obtained. I would agree this will be costly and is largely based on the company matter. UK inheritance tax laws, duties, controlled foreign company risks and issues and withholding taxes and more will all be impacted.
At a fundamental level, if you pay tax in the UK on the IP are you exempt from tax in Australia or is there a possibility of being taxed twice?
Ok. A family friend is a small business tax account in the UK and was recommending setting up a company (my partner is a UK citizen) and purchasing the property that way. I think that limits you to a 15 or 18% business tax with an extra 10% if you want to sink the company should you want to sell everything (I think they were the numbers). This is what I wanted to compare against Aus to see whether the investment is worth it.
