-- Bentleys has released new insights into the growing movement of Australian capital into London’s property market, detailing the opportunities and risks for investors navigating one of the world’s most competitive real estate hubs. The firm’s latest analysis underscores that while London remains a powerful draw for global investors, complex international tax rules demand strategic compliance and careful structuring to safeguard returns.
The report from Bentleys explores why London continues to attract Australian business owners and established investors seeking portfolio diversification, currency hedging, and long-term capital stability.
The city’s appeal extends well beyond prestige or tradition. From the glass towers of Canary Wharf to the creative conversions in Shoreditch, London offers a combination of resilience, liquidity, and opportunity that few global financial centres can match. For Australians, the motivation is often practical as well as aspirational — securing assets near leading universities such as UCL or LSE, establishing a European business base, or balancing exposure between hemispheres.
Bentleys’ analysis notes that while acquiring a London property is often seen as a milestone, the real challenges begin after the purchase. Once an Australian entity starts earning income from a UK asset, it enters a complex cross-border tax environment that requires active management. Stamp Duty Land Tax (SDLT) applies at the point of purchase, while ongoing rental income is subject to UK Income Tax. Those profits must then be reported to the Australian Taxation Office (ATO), often under the terms of the double tax treaty between the two nations.
A particular area of concern arises when investment activity transitions from passive ownership to active business management. If an Australian company begins operating a business from its UK property — for example, managing short-term rentals, providing consultancy services, or maintaining a sales office — it risks being deemed to have created a Permanent Establishment. Under this classification, profits generated in the UK may fall within the ATO’s jurisdiction, triggering additional reporting obligations, complex compliance requirements, and exposure to potential penalties.
Bentleys emphasises that these scenarios can be avoided with structured, proactive planning. Establishing a clear compliance strategy that defines the nature and extent of overseas operations is critical. The firm’s guidance advises that businesses and investors alike ensure they are meeting all UK and Australian regulatory requirements from the outset.
Once compliance measures are in place, strategic structuring becomes the next step in maximising return on investment. Ownership structure — whether through an individual, trust, or corporation — has a direct impact on liability, tax exposure, and long-term profitability. In addition, the careful application of Australia’s depreciation rules and planning for Capital Gains Tax (CGT) in both jurisdictions can significantly improve financial outcomes upon eventual sale or divestment.
Bentleys’ insights reaffirm that while London remains one of the world’s premier destinations for global capital, cross-border investors must treat tax strategy and compliance as integral parts of their investment plan, not as afterthoughts. Effective international structuring enables investors to achieve sustainable results while maintaining transparency with regulators on both sides.
For comprehensive guidance on managing international tax obligations, Bentleys has made available the International Tax Guide for Foreign Companies Doing Business in Australia, a detailed resource outlining ATO requirements for foreign entities operating within Australia.
With Australian investment in London continuing to rise, Bentleys advises that the difference between a successful and a burdensome overseas acquisition often lies in informed planning and professional oversight. The firm continues to support businesses and individuals expanding across borders through integrated advisory, accounting, and tax compliance services.
About Bentleys
Bentleys is a leading network of advisory, accounting, and audit firms offering strategic guidance to businesses and investors across Australia and internationally. The firm provides expertise in taxation, business structuring, compliance, and cross-border expansion, helping clients to achieve sustainable growth through sound governance and informed decision-making.
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Name: Bentleys
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Organization: Bentleys
Website: https://www.bentleys.com.au/
Release ID: 89175072
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