Foreign rental income questions

Hello, Situation: - I am a UK tax resident with EU citizenship. - For tax year 2022-2023, I will need to submit my tax via self assessment as I have earned more than £100,000. (regular employment) - I own a flat in the EU that I've been renting out since August 2023 (tax year 2023 - 2024). - The flat has been on the market since January 2023 and I have incurred allowable expenses, but have not received any rent for tax year 2022-2023. - For tax year 2023 - 2024, my rental income with allowable expenses deducted will be less than £2,500. My questions: 1) For tax year 2022-2023: As I've incurred expenses for the property whilst not receiving rent, can I submit these expenses against the £0 rental income with the goal of carrying forward this loss? I can prove I engaged the estate agent in December 2022. 2) For tax year 2023-2024: Gov.uk guidance on rental income states you must report rental profit if "more than £2,500 after allowable expenses" or "£10,000 or more before allowable expenses". I am assuming, however, I will need to report this rental income as part of the self assessment submission as the trigger for self assessment is my regular salary. Could you please confirm? 3) Assuming I need to report the

Hi,

You can find guidance in PIM2500 onwards which states that a rental business begins when letting first commences.

PIM2505 - Beginning and end of a rental business: commencement

Allowable revenue expenditure incurred before the rental business begins can be relieved. You may be able to claim a deduction for these expenses once the letting begins as set out in PIM2505, for an expense to be allowable the expenditure must be incurred wholly and exclusively for the purpose of the rental business and must not be capital expenditure.

As your letting only began in 2023-2024 the expenses would be claimed in that year. As you already complete a Self Assessment tax return you should also report your overseas rental income/expenses on the SA106 Foreign supplementary page.

Thank you.

Thank you. It seems my third question was cut off for some reason. If the rental profit is below £2,500 after allowable expenses, will there be tax due on that rental income or will it be exempt because I would not have to report it if I didn’t already complete a self assessment?

Hi,

Any property income over £1000 is taxable as this exceeds the property income allowance. This can be taxed through PAYE if the amount is between £1000 and £2500.

You must contact HMRC  if your income from property is over £1000.

You can find further guidance here:

Renting out your property 
PIM4426 - Property allowance: contents: definitions: relevant property income
PIM4410 - Property allowance: contents: overview

Thank you.