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Posted Tue, 03 Jan 2023 17:01:26 GMT by Andre Higgs
hi I became a UK tax resident in the tax year 2021/22. I have an employment for a Hong Kong-domiciled company (the company generates its revenue solely outside the UK). I own a few properties in Japan for investment which I pay property tax in the country. I have filed my tax return for 2021/22 in the UK on remittance basis through self assessment. I note that the rental income from the Japanese properties are taxed in the UK. While I cannot remit my salary to the UK, I wonder if I can remit the rental income from the Japanese properties to the UK without any further tax implication. Thanks in advance.
Posted Wed, 18 Jan 2023 18:01:01 GMT by HMRC Admin 20
Hi Andre Higgs,

Article 6 of the UK / Japan double taxation agreement, which can be found at:
states that "Income derived by a resident of a Contracting State from immovable property (including income from agriculture or forestry) situated in the other Contracting State may be taxed in that other Contracting State".  
This means that if you are resident in the UK and have income from property located in Japan, you are taxable in Japan.  
If you remit this income to the UK, you will need to declare it on your tax return, but, you can claim a foreign tax credit of up to 100% of tax deducted in Japan.
Have a look at the guidance on the remittance basis at:
 RDRM30000 - Remittance Basis: contents

Thank you.
Posted Thu, 19 Jan 2023 09:39:58 GMT by Andre Higgs
Thanks for the reply. You mentioned that "If you remit this income to the UK, you will need to declare it on your tax return..." Does this mean that if I don't remit the rental income from Japanese properties, I do not need to declare that income in the UK and no income tax will be incurred in the UK?
Posted Mon, 23 Jan 2023 15:22:46 GMT by HMRC Admin 18

As stated in RDRM31030: "The remittance basis provides what may be viewed as a ‘deferral’ of the UK tax charge in respect of foreign income and gains, that is, there is no charge when these foreign income or gains arise or accrue. Instead, foreign income and gains are only taxed in the UK when they, or amounts ‘in respect of’ or amounts ‘representing’ those income or gains, are ‘remitted’ to the UK. If foreign income and gains remain offshore and are never regarded as remitted to the UK, the tax charge is effectively deferred indefinitely". See guidance at:
Residence, Domicile and Remittance Basis Manual

Thank you.

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