Offshore law firm Collas Crill tells Malaysian investors to be informed about UK's tax system before buying local property.

More Malaysian investors, particularly the middle class, are looking into buying property in the UK to generate income returns, according to Channel Islands-based law firm Collas Crill. 

In a media release, the company said that Malaysian middle class have an average budget of around £800,000 ($1.36 million) and are interested in buying into regeneration zones outside prime London. This means properties near central London or larger properties in the booming east London postcodes. 

Collas Crill notes that while the potential is great, investors must also know that new taxes introduced by the UK government can make the decision a little more complex. Based on common practice, Asian buyers have usually acquired property through an overseas company that is often incoporated in the Caribeean or the Channel Islands. Thus, purchasing UK residential property could mean additional taxes.

"Malaysian investors need to take specialist advice both at home and in the UK to ensure that the relevant property taxes are being taken into consideration when deciding how best to structure their purchase," said Michael Morris, UK property expert at the firm, which services Malaysian property investors through its office in Singapore. 

Malaysian firms that have successfully invested in London properties include SP Setia, Sime Darby and the Employees Provident Fund.