Question:
I own a buy and leaseback flat in France. The French tax company I use states that there is a tax loss of £10,000 on the property this year, as in France you can claim against the value of the entire property to reach this figure. Using the UK formula, I end up with a profit of £3,000. Can I use the French calculation or must I apply HMRC calculations?
Arthur Weller replies:
If you look at www.hmrc.gov.uk/manuals/pimmanual/PIM4703.htm you can see that you use UK property tax rules for calculating your UK tax liability. However, in a case (perhaps this year this does not apply to you) where you are liable to tax abroad on the same profits, you can usually apply double tax relief. See HMRC’s SA106 Notes.
