Robert Blay, who is standing in North East Hampshire, told undercover reporters from the Daily Mirror that he would “put a bullet between the eyes” of the Conservatives’ Ranil Jayawardena.
The video shows Mr Blay saying that Mr Jayawardena “could become our first Asian MP”, adding: “If he is I will personally put a bullet between his eyes”.
The 55-year-old went on: “If this lad turns up to be our Prime Minister I will personally put a bullet in him. That’s how strong I feel about it.
“I won’t have this f***** as our Prime Minister. I absolutely loathe him.”
The remarks are said to have been made outside a meeting where Nigel Farage was giving a speech to voters in the seaside town of Ramsgate, Kent.
A Ukip spokesman said: “Mr Blay has been suspended with immediate effect”.
A former bank accountant, Mr Blay is standing in North East Hampshire, which saw a Conservative majority of 18,500 at the last election.
Speaking about his own election prospects, Mr Blay told the reporter: “It makes me quite sick.
“But I’ve always said in my constituency you could put a monkey out there with a blue rosette on and it would win.”
“I said to his dad about two months ago – ‘When did you come to Britain?’ He said ‘In the “Seventies’.”
“I said ‘Why did you come?’ He said ‘Things weren’t very good politically in Sri Lanka and I came here and I could train as an accountant’.”
“So he’s come here and ponced off us hasn’t he like all the East Europeans are? That’s what is happening. Continually.”
Blay continued: “His name’s Jayawardena and I’m told that name is a Tamil name. Well the Tamils were Indians which went to Sri Lanka to take it over and they got their asses kicked. So he comes here, ponces off us and then his son’s in our political system.”