Buying a property abroad

lilab_2

Hi All,

Not sure if I have put this question on the right forum, but here goes.

If I were to buy a holiday home abroad and rent it out when I am not using it, do I pay tax on the rental income in the UK or in Italy - which is where I am thinking of buying.

Thank you

gfplux

You would declare the gross and net income to the UK f that is where you normally live.
Or you could declare it to the Italians first, pay the tax due then prove to the UK authority's that tax has been paid.

lagoslife

This may be useful;

http://www.holiday-rentals.co.uk/info/owner-resources/tax-and-legal/holiday-home-international-property-tax-guide/italy-property-tax

If in doubt, consult a qualified tax expert.

lilab_2

Thank you both for your replies. Apologies for The delay in replying, I've been on holiday.

Mrs_Z

You would certainly have to pay taxes on the rental income for the Italian authorities and as gfplux said, then declare this to the UK authorities. The bottom line is that you should not be paying tax twice. However, what I'm not sure about is that if you are ordinarily tax resident in the UK and the tax you've paid to the Italian authorities is less than would be due in the UK - then you might have to pay the difference to the UK. I have no idea how this works in practice but that's my understanding.I would strongly recommend that you hire a 'commercialista' to take care of your tax affairs in Italy, especially if you are not fluent on the language. There is even a tax to pay for 'the potential rental value' of the property - yes, you read it right.