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I’m looking for property overseas – can I offset the travelling cost?

Question

I have travelled overseas to look at investing in property in Spain. My trips have cost me £600 but I have not yet purchased anything. Can I offset this cost against my UK property? If not then will I be able to offset it if/when I buy a property in Spain?

 

Ian Says

You cannot offset the travel cost against the UK properties as the expense

is not connected with them.

 

You should note that losses on properties abroad cannot be offset against UK income in any form, as the foreign income or loss is dealt with under a separate case of the Taxes Act (effectively this means the losses or profits are ring fenced).

 

Bear in mind when looking at property abroad that you will need to comply with local tax laws and file locally as well as reporting the income in the UK. This is a cost many people do not factor in when buying abroad.

 

You may be able to offset this cost against the income from the property in Spain once bought, although this may not be an allowable expense for Spanish tax purposes and you

Would have to check locally.

 

Another point worth mentioning is that different countries have different ways of calculating the profit for tax purposes and hence your profit can be different for UK purposes, meaning you may have to calculate the income and expenses twice in order to file correct tax Returns in both countries.

 

If you bought in a third country then this is abortive expenditure and not allowable if you bought in, say, Portugal instead.

 

For more information please refer to our International Property Tax section.

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