Uk domiciled and tax on rental income in republic of ireland

cvc_2

Hello
I recently found out that foreign rental income has to be declared on self assessment forms in the Uk (I've been here 9 years and i'm a higher rate PAYE taxpayer). My brother and me have a jointly owned property in Ireland which my brother pays tax on annually (he's lived in Germany for 15 years). The rent is paid into a joint account in my name and an agent who has mangaged repairs, etc. Before I left for England it was easier for me to set up an account in my name and agent's as my brother had been out of the country longer.
My question is whether I have to declare this rental income as I don't benefit from it nor remit it to the Uk.
Any advice would be great,
Thanks
Conor

Cook_County

The remittance basis did not apply to Irish income before 6 April 2008 so the income was taxable in full. Since that date you could have avoided paying UK tax on the income if you claimed the remittance basis, subject by now to paying the annnual £30,000 RBC. Do you pay the £30,000 a year? If not you need to declare the income.

cvc_2

Hi
Thanks for your reply.
I haven't paid a remittance charge.
The annual tax paid in the ROI is roughly 700 euro but its paid by my brother.
As the rental income goes into a ROI account in my name, and the income is from a ROI property in joint names with my brother, does it mean I'm liable for UK tax at 40% on half of the income, or even just the interest on the account? All the income goes to my brother.
Thanks
Conor

Cook_County

If you beneficially own 50% you are taxable on 50%. You would of course be able to claim credit for Irish tax to offset UK tax on any doubly taxed profit.

cvc_2

OK thanks. I suppose what is the definition of "beneficially" if I've waived income?
Conor

BoGoF

Legally you are still entitled to 50%, you can't give up those rights without altering the legal ownership of the property. If I'm reading your post correctly then the money is paid into your account - how is that 'waiving the income'

I would suggest you get professional advice as residence, domicle and remittance basis are complex issues. Get it wrong and you could be landed with the £30,000 remittance basis charge !!

jimmo

BoGoF wrote: »

Legally you are still entitled to 50%, you can't give up those rights without altering the legal ownership of the property.

That is only correct for UK tax purposes when the joint owners are married (or in a civil partnership).
Other joint owners can split the profits any way they like.
http://www.hmrc.gov.uk/manuals/pimmanual/PIM1030.htm
I don’t know the rules for Eire or Germany but I echo your concern about the rental income being paid into the OP’s account.

BoGoF

jimmo wrote: »

That is only correct for UK tax purposes when the joint owners are married (or in a civil partnership).
Other joint owners can split the profits any way they like.
http://www.hmrc.gov.uk/manuals/pimmanual/PIM1030.htm
I don’t know the rules for Eire or Germany but I echo your concern about the rental income being paid into the OP’s account.

Good spot Jimmo.