Tax on Rental of US Primary Residence as Dual US & UK Citizen now in UK

Morning, need some advice. BACKGROUND - I am a dual US & UK citizen. Born in UK. - Most recently I lived permanently in the US from 2005 -2018, Netherlands 2018-2022 and in the UK 2022-current. - When i left the US in 2018 i started to rent out my home there while working overseas - As an US citizen I am obliged to submit an annual US tax return on all worldwide income whether living there or not. I have been doing this consistently declaring all incomes - Since being in the UK i have been continuing to submit my annual US tax return where my US rental income and other income from cash savings has been taxed, along with my UK income from work/savings interest. - Since being working in the UK i have been paying tax via PAYE QUESTION - Do i need to anything as regards to UK tax for my US income if I am declaring it on my annual US tax return? Many thanks. Reg.

Hi,

As you are UK resident, you are taxable on your world-wide income in the UK, using the arising basis. As you have UK domicile of origin, you cannot use the remittance basis. What this means is that the tax treaty between the UK and the USA, applies.  
The tax treaty gives the USA the right to tax income from immoveable property in the USA, first. It also give HMRC the right to tax it as well (as part of your world-wide income).
This means that you will need to complete a self assessment tax return, to declare all your sources of income and capital gains. You would declare the property income and tax deducted in the foreign section of the tax return.  
To avoid double taxation, you would claim a credit for up to 100% of the tax paid in the USA on the property income, so that you do not pay the same tax twice.  If you do not already submit a tax return, you can register for a return at:

Check how to register for Self Assessment

Thank you.

Thank you. Sounds like I would need to file back for UK tax year 2022/2023 when i returned here and 2023 onwards for the period i remain living in the UK Is that correct. Thanks.

Hi reg1100,
As you returned to the UK during the 22/23, you will need to review your residency position, to determine whether you need to declare the Overseas rental income in the period from 6 April 22 to the date you arrived in the UK.
Please have a look at the guidance at RDR3:
RDR3 Statutory Residence Test
If you are deemed tax resident in the UK for the whole tax year, you need to look at split year treatment.
If split year treatment does not apply, you need to declare your world-wide income from 6 April and claim any foreign tax credits that are allowed.
If it does apply you claim split year treatment and only include your worldwide income from the date you arrived in the UK.
If you are treated as not resident for the whole tax year, you would declare this and only include income and capital gains that arise in the UK.
In all three possibilites, a self assessment tax return is required.
Thank you.