Tax obligation on rental income overseas - if the income isn't sent to UK

My wife and I have a house in Ireland which we're looking to rent out in 2025. Any rents received would likely be in an Irish bank account but my query is which tax jurisdiction will I have to declare the rental income to be taxed? The rental income won't be sent to our bank account in the UK so I just need to clarify where we stand in terms of tax obligations in the UK before I seek advice from a tax advisor in Ireland.

Hi Colm Phelan,
If you are UK resident and domcile, you would still need to declare the rental income in the UK as you are liable on your worldwide income.
Ireland may also tax you as the property is there but you can then claim Foreign Tax Credit Relief to reduce your UK bill
You can find out more here:
Tax on foreign income
Thank you. 

Hi How do I ask a question on foreign property rental income ? I was given a residential property in Spain in March 2023 which I rent out to a long term tenant. I am a Uk resident & tax payer. I pay up to date tax to Spain tax office for all rental income at 24% rate on gross rental income as no deductions are permitted since brexit. I am now planning on completing a Uk self assessment 2023-24 therefore how do I record this and how do I make sure I do not pay double tax as my entire income will still be under £50k with the foreign rental income and Uk earnings? Thanks

Hi Jdjplee2002,
Please refer to guidance here:
Tax on foreign income
And
Relief for foreign tax paid (Self Assessment helpsheet HS263)
Thank you. 

Many thanks. Can I ask - since Brexit and being a Uk resident and non resident owner of a Spanish property that I rent out to a tenant I pay full tax to Spain’s authority and cannot make any deductions on the gross rental income eg repairs, bills etc therefore there are no allowable expenses. When it comes to filling g in HMRC FTCR SA106 form what do I include in terms of expenses box 17 SA106?

Hi Jdjplee2002

You can claim expenses for anyallowable costs in the tax return to reduce the profit that you declare in the UK.
This will therefore be less than that declared to Spain and will therefore affect the amount of foreign tax credit that you can claim.

Thanks

 

This is my query too - please may I check that I've understood it correctly. So here are some fictional figures for my calculation: Spanish income from FHL rental = € 9,000 Spanish tax already paid at 24% = € 2,160 Total unclaimed deductions = € 4,000 So do I minus the deductions from the income eg € 9,000 - € 4,000 = € 5,000 Then recalculate the Spanish tax on this new figure of € 5,000 at 24% = € 1,200 and enter € 1,200 in the FTCR box? Thanks

Hi ,
 

Thank you for your question.  All figures must be in pounds sterling when completing the SA105 FHL boxes.  As previously stated you include gross income in box 5, then any deductions in the appropriate boxes.  You can include the total foreign tax paid on your Spanish FHL to claim foreign tax credit relief by filling in the section ‘Foreign tax paid on employment, self-employment and other income’ on page F6 of the Foreign SA106 supplementary pages. Relief is restricted to the UK tax chargeable on this income as set out in https://www.gov.uk/government/publications/calculating-foreign-tax-credit-relief-on-income-hs263-self-assessment-helpsheet/relief-for-foreign-tax-paid-2024-hs263. Alternatively you can take off any foreign tax paid in box 9 on page UKP1 of the SA105 as set out on page UKPN4 of https:   assets.publishing.service.gov.uk/media/65f97803703c42001a58ef12/SA105_Notes_2024.pdf  . Thank you .

Thank you for your reply. So, have I got this right now? Using Pounds for my fictional figures : Spanish income from FHL rental = £9,000 Spanish tax already paid at 24% = £2,160 (no deductions allowed in Spain). Calculated allowable expenses = £4,000 Gross income goes in SA105, UKP 1, Box 5 - £9,000 All allowable deductions in SA105, UKP 1, Box 9 - £6160 (£4,000 + £2,160) (If your total property income (Including FHL income) before expenses is below £85K, you can just add up your FHL expenses and put the total in Box 9.)