Rental income from foreign properties (Italy)

Hi, I am a UK tax resident I own a property in Italy that I rent privately, for which I pay property tax in the country (Italy). I'd like to know if: - Do I need to declare my rental income if I don't transfer the money to the UK? - Do I need to declare my rental income if I transfer my money to the UK? - Has Brexit affected the UK / Italy double taxation agreement? Many thanks, Kind regards

Hi,

As a UK tax resident you need to declare your worldwide income in the UK. you can then claim relief for the tax paid in Italy to reduce any UK tax on that income.

Further guidance is at:

Tax on foreign income

Thank you.

Hi,

They may have different circumstances. Your answer is based on the question you asked. Please refer to guidance in the link provided in the orignal answer.

Thank you.

Hi, there is the Italy-UK Double Taxation Convention that in ARTICLE 6 states: "Income from immovable property - 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 State.” According to Italian accountants, because of this convention between UK and Italy there is nothing to pay or declare in UK for rental income or capital gain from the house sold, since it has already been taxed in Italy. Is it actually so? because of this convention is there a special procedure with Italy on rental income from foreign properties (Italy)? Does it need to be declared in self assessment or not? Many thanks.

Hi,
 

Article 6 covers income/gains from property that cannot be moved.  It advises that if you are resident in the UK, then any income/gains arising in Italy are firstly taxable in Italy and then the.  You need report and pay any tax liability arisintg in Italy.  In addition, you need to declare the income/gains in pounds sterling in your self assessment tax return.  You need to show the income on Sa106, gains on SA108 and either or both on SA106.  You are entitile to claim a foreign tax credit relief of up to 100% of the foreign tax paid.  This claim is made on SA106. Thank you.