Holiday Lettings news - Tax havens recommended for investors in holiday homes abroad

Tax havens recommended for investors in holiday homes abroad

A number of tax havens have been recommended for property investors. Overseas property investment in tax havens is a popular option for would-be homeowners wanting to protect their assets from the problems rocking the economic markets.

Tax havens for those wanting to invest in a holiday home overseas, as recommended by the Financial Times, are:

The Caribbean
• Property investment in the Caribbean offers the "most winning ledger-lifestyle combinations" and there are several islands that are worth consideration.
• Holiday homes in Bermuda, Barbados, the Bahamas, the Cayman Islands and Grenada are all good options.
• As a rule of thumb there are no income, capital gains (CGT), value added, sales or wealth taxes.

Mauritius
• A holiday home in Mauritius is a good option due to favourable tax treaties with more than 30 countries.
• The purchase of a villa in Mauritius allows for residency and qualification for its 15 per cent tax rates. There is also neither CGT nor inheritance tax (IHT).

The Seychelles
• Owners of a holiday home in the Seychelles benefit from a "very-few-strings-attached attitude towards tax" as well as a beautiful setting.
• There is no income tax, CGT or IHT.
• Rental income is, however, counted as company income and taxed accordingly.

Dubai
• "Every foreigner in Dubai is attracted by the tax-free environment", according to one estate agent.
• Dubai has several double-taxation treaties in place with high-tax countries, meaning you may not need to pay tax in both your country of origin and country of residence.
• There are, in essence, no income or capital taxes in place.

Cyprus
• Retirees wanting to buy a holiday home abroad may be attracted to Cyprus when it comes to paying tax on pensions; one investor paid 5 per cent, compared to 40 per cent in Britain.
• Cyprus has double-taxation treaties with 33 countries, including most western high-tax countries and most central and eastern European states.

Madeira
• Owners of holiday homes in Madeira will benefit from its 46 double-taxation treaties.

Malta
• Malta has moderately high internal taxes, but offers low tax regimes to individuals.

Jersey and Guernsey
• The Channel Islands have many low-tax personal incentives.
• Being a British tax haven, investors can return to the mainland when needed, points out financial advice group Blevins Franks.
• You cannot buy a property in the Channel Islands unless you are a resident there.

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