The Double Taxation Treaty between Bulgaria and the UK

Just to reiterate: it is possible to be tax resident in more than one country at the same time. In this case you could end up liable to pay the same tax in both countries. Also, a particular item of income could, under each country’s different rules, be taxable in both the country in which it is sourced and also in the country in which the recipient of that income is resident.

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For these reasons, many countries have concluded agreements called double taxation agreements with other countries to protect individuals from being required to pay tax twice. Bulgaria and the UK have such an agreement.

If you feel you might be at risk of double taxation, it is important to familiarize yourself with the double taxation agreement between Bulgaria and the UK and to get advice from a professional who is familiar with this field and who is acquainted with your personal circumstances.

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To Buy as an Individual or as a Company?

Before Bulgaria joined the EU,you had no option but to register a company if you were buying property with land. However as pointed out in the previous chapter, there is now the possibility, if you are an EU member state citizen, to own property as an individual as long as you are you are legally resident in Bulgaria (see pp.m-i2).Thetax breaks for individuals appear better than those applied to companies (you can sell one property per year without tax) and you should consider buying as an individual if possible.

It is worth pointing out that anyone who has already bought a property via a company might also consider closing the company down and taking the property into their personal name to take advantage of these tax breaks for individuals before any further price increases.

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Tax Planning Generally

Do it, and do it as soon as possible. Every day you delay will make it more difficult to get the results you are looking for. There are many possibilities for tax planning for someone moving to Bulgaria.

Some points worth considering are:

• Time your departure from the UK to get the best out of the UK tax system.
• Think, in particular, about when to make any capital gain if you are selling your business or other assets in the UK.
• Arrange your affairs so that there is a gap between leaving the UK (for tax purposes) and becoming resident in Bulgaria.That gap can be used to make all sorts of beneficial changes to the structure of your finances.
• Think about giving away some of your assets. You won’t have to pay UK wealth tax on the value given away, and the recipients will generally not have to pay either gift or inheritance tax on below-limit gifts.

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