Taxation for Italian residents

On my retirement I am planning to live with my EU citizen wife in Italy and will be an Italian resident. I will have an occupational pension from USS, and rental income from my flat. Can you advise me under the dual taxation arrangement (a) where I need to pay these taxes (b) what I will need to do to submit the taxes and to ensure that I am not double taxed.

Hi Danny Burns,

As you will be resident in Italy, you would report all of your income to the Italian tax authorities.  
If your pension is not arising from the UK, then this is reported to the Italian tax authorities.  
Any income from UK land and property must be reported to HMRC in a self assessment tax return.  
You will need to complete SA100 (main tax return), SA105 (Property) and SA109 (residence).  
The double taxation agreement allows for Italy to also tax your UK rental income, but you can claim tax relief for tax paid in the UK.  
You can register for self assessment at Register for Self Assessment, if not previously registered.

Thank you.

I had understood that the pension tax should be payable in Italy as it is a UK occupational pension but not a government pension. Can you confirm that I should just declare it to the Italian tax authorities and not to the UK? I understand from your reply that I need to declare any rental income to both authorities and then get tax relief. Does this mean that I would pay the Italian authorities the difference between the UK tax already paid and the higher Italian tax, or would I have to pay both full amounts and claim back from the Italian state? It is not clear how I would manage different tax years, especially as the UK tax year starts later than the Italian one. Any advice appreciated. Thank you - Danny

Hi Danny Burns

Article 18 of the double taxation agreement advises that residents of Italy, who have non government UK pensions/annuities are taxable only in Italy on their non government UK pension/annuities.  
To request that no tax is deducted from your UK pension, you will need to download and print off the form DT individual here Double Taxation: Treaty Relief (Form DT-Individual.  
Once you have declared your pensions/annuities sources, including state penions; please send the signed and dated form to your local Italian tax office.  
The Italian authorities will validate the form to confirm you are an Italian resident and taxable on those pension in Italy and return the form to you.  
Please then send the validate form to HM Revenue and Customs Pay As You Earn and Self Assessment BX9 1AS, United Kingdom.  
With a validated form, we can authorise your UK pension provided to stop deducting tax and repay any tax deducted in this tax year.  
We can send you a cheque for any overpaid tax up to the last 4 tax years.

Thank you
 

Hello, I am a uk citizen looking to relocate to Italy permanently. I will be looking to continue to have my income from the uk from my employer whilst living in Italy. Will I have to pay double taxation on my income from the Uk?

Hi Eranrado1986,

No.  You should only be taxed in Italy on this income.  
If you do not complete self assessment tax returns, you will need to submit P85, to notify HMRC that your are leaving the UK, but will continue to be employed outside the UK, by a UK employer.  Get your Income Tax right if you're leaving the UK (P85).  
If you have to complete a tax return in the tax year in which you leave the UK, then instead of form P85, you would submit your tax return as normal.

Thank you.
 

Hello. I am resident in Italy and have been receiving a UK pension since January 2023 for the years I worked there. I am now retired in Italy and receive my main pension from them. My Italian accountant says I need to present a January-December statement from the UK of my pension and not one with the UK financial year ending in April. How can I request this, please?

Hi Florac
HMRC will not provide your UK income in the January to December format.  
We can only provide April to April figures, as supplied by your pension scheme.  
Perhaps your pension provider may be able to do this.

Hello, I am an Italian resident who has been living and working in the UK for 8 years (2004-2012) before permanently relocating in Italy. Is my right to receive a UK pension - for the years I worked there - affected by Brexit?

Hi xk5ukb473,
You must have a minimum of 10 qualifying years to obtain the basic UK state pension.  
You should refer to the gov.uk website for more information:
Check your State Pension forecast
Thank You.

HMRC Admin 20, That is correct but those years do not have to be only UK years. Under the EU regulations on the coordination of social security systems, which continue to apply for those covered by the EU Withdrawal Agreement, xk5ukb473's Italian and UK years would be aggregated and if they then exceed 10, a UK pension based on their 8 years would be payable in addition to any Italian pension they may in due course be able to claim, applying the same aggregation regulations.

My partner and I are planning to move to Italy under the Elective Residence Visa programme. I have passive income to cover the requirements of that visa. I also have a UK based limited company in which I am the only shareholder. Is it possible for me to elect to pay UK tax on the income from my UK business rather than paying tax in Italy?

Hi 

The limited company is a UK company and so will be required to pay corporation tax in the UK.  Any income you receive as an individaul, will  be taxable in Italy.  
Please have a look at article 7 regarding business profit and article 16 director's fees.  (CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND).

Thanks

Good evening. Hopefully someone can shed some light....I have property in the UK but live in Italy and have been resident there for over 20 years. I declare the UK property rental income in the UK, less my UK personal tax allowance, so pay relatively low amount of UK tax. Italy says I have to declare the UK property rental income in Italy too, and deduct the amount of UK tax I have actually paid, rather than the amount I have been considered for, subsequently in effect annulling my UK tax allowance. This issue is doubled as the UK properties are jointly owned by my wife and we each have a UK tax allowance. It seems to me that this is double taxation. Can anyone confirm whether this is both correct and legal? Thank you.

Sounds as though Italy is doing what the double tax treaty says. Have a look at Article 6(1) or the link from HMRC in the post above yours. The UK can tax the income as it arises in the UK and Italy can tax the income as you are resident and it is part of your worldwide income. Italy would then give relief for the tax you have paid in the UK - no double taxation there.

Hi  Thanks for your reply. It doesn’t quite address the question I had though. Are you an HMRC employee? The question is over the UK personal tax allowance (approximately £12,500 per person). Essentially, the way Italy does it wipes out the benefit of the UK allowance. Any thoughts?

Name removed admin .

No, I am not an HMRC employee - I am simply reading the treaty. Italy, which has primary taxing rights over the worldwide income of its residents, is doing no more than applying its tax laws and the treaty. Double taxation is avoided by giving relief for tax paid in the UK. The fact that the UK tax is less than the Italian tax is of no relevance. I am sure HMRC will correct me if I am wrong.

Thanks Gary. I do understand what you’re saying. I think it’s very bad form that they effectively negate the UK personal allowance though. I have been “considered” for tax on a higher amount, and pay less due to that allowance.

Hi,

Please refer to Article 6 of the Double Taxation Agreement held between the UK and Italy which states “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.” The income is taxable in the UK.
I am unaware of the Italian tax regime. You should consult with the Italian Tax Authorities.
Thank you.

I am looking to make a claim under Unilateral Relief for Inheritance Tax paid on porperty in Italy...where/how do I make that claim?