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Posted Thu, 16 Nov 2023 12:30:39 GMT by
In early 2022 my father donated an apartment to me in Brasil (valued at around £50k). He did it "with usufruct", which means he can still earn income from renting it out, which he has been doing for the past couple of months. This rent income (around £300/month) goes to him, and he pays taxes on it in Brasil. Going forward, the plan is that he'll be periodically transferring this amount to me in the UK. About me: I am Brazilian, with Settled status in the UK, where I live for over 5 years. I am employed. I've been living and paying mortgage on a flat here in the UK for over 3y (this is my first property). In 2022 I did a "Definitive Country Exit Statement" in Brasil (this acts as my last tax return there). I also don't have a bank account there anymore. My questions: 1. Do I have any legal or financial duties or obligations here in the UK in relation to that property I own in Brasil? For example, do I need to pay any taxes or declare it here somehow? 2. In the future, if I decide to buy a second property in the UK, will my ownership of this additional property overseas affect in any way this process? How so? 3. Am I correct to assume that the money my father will transfer to me is considered a gift? After all, the actual rent income goes to him (and he pays taxes on it in Brasil). If so, does this mean I don't have to pay taxes or declare it in the UK? Note I'd be receiving this gift periodically - around £900 every 3 months (probably via wise.com transfer).
Posted Wed, 22 Nov 2023 11:54:39 GMT by HMRC Admin 20 Response
Hi John8197340217,
Although you are the legal owner of the property in Brazil, your father is the beneficial owner, so he is taxable on the property income in Brazil.  
There is no tax liability in your father sending you sums of money into your bank account from Brazil.  
If that money generates interest in your bank account, then the interest is taxable and should be declared.  
We cannot comment on the purchase of a second property in the UK.  If the property is rented out, then you would meet self assesment criteria and
would have to declare the UK property income in a self assessment tax return.  
Any money your father sends you would be considered a gift for tax purposes.
Thank you.

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