HMRC self a'ment - EU citizen who's resident and domicile in UK, foreign income from rented out flat

sillygoose1

Asking in relation to my partner who is a Belgian citizen and moved here to the UK relatively recently. He owns a property in Belgium which he lived in before moving here, but now rents out. Started renting out part way through the 18/19 tax year received approx 3 months of rent in that tax year.

He works as a normal employee (not self employed, a Director or anything like that) for a standard UK company - has paid income tax & NI etc through PAYE. But he also has to fill in the self assessment with "foreign income" (i.e. rent from the property in Belgium).

I understand that there is a "double taxation agreement" (DTA) between UK and Belgium -- this DTA states in the case of property income essentially that "Belgium may tax it" (in this situation). (the word 'may' is in the original agreement!)

We are not sure how to fill in those foreign pages (and thought I'd ask here before paying for professional advice in case it is straightforward and I am being a doofus - which is highly likely....)

We can put in the amount of rental income and the expenses (according to the HMRC notes of what's allowable) ok.

The part I am unsure of is how that DTA applies in this case, so is that income only taxable in the other country and if so how should we "zero it out" to HMRC?

unholyangel

If you're claiming relief under a DTA you'll need a certificate of residency from the country you'll be paying the tax in.

https://www.gov.uk/guidance/get-a-certificate-of-residence

Cook_County

Sounds like your partner is not domiciled within the UK but is not electing to claim the remittance basis. On this basis worldwide income and gains are reportable. Credit for claimed for Belgian tax on any doubly taxed profit.

sillygoose1

Actually I had assumed he was 'domiciled' here but is that not the case then? (he's moved here with the intent of living here permanently, has most financial affairs here etc) and does that make a difference?

In any case, so far we have got details of the amount of rent received and costs/expenses paid which (in this tax year) may outweigh the rent or not quite. So there may be a small profit on paper -- don't know how much the tax will be on this in Belgium since that income won't get taxed until the end of this year (Belgian tax year is calendar year).

Is this fairly straightforward to sort out with an accountant? Do we need one?

I thought it would be pretty simple (I'm in SA as well for self employment and other bits) but struggling now I've got into the weeds of the details :-(

unholyangel

sillygoose1 wrote: »

Actually I had assumed he was 'domiciled' here but is that not the case then? (he's moved here with the intent of living here permanently, has most financial affairs here etc) and does that make a difference?

In any case, so far we have got details of the amount of rent received and costs/expenses paid which (in this tax year) may outweigh the rent or not quite. So there may be a small profit on paper -- don't know how much the tax will be on this in Belgium since that income won't get taxed until the end of this year (Belgian tax year is calendar year).

Is this fairly straightforward to sort out with an accountant? Do we need one?

I thought it would be pretty simple (I'm in SA as well for self employment and other bits) but struggling now I've got into the weeds of the details :-(

It can be done without an accountant but if you're struggling or just don't want the hassle then it might be an idea - just make sure they're properly qualified. Or you could try calling HMRC and they should be able to provide some info but don't expect them to hold your hand through it.

You're generally considered resident for tax purposes (at least under UK law) if you're resident for 183 days or more. If you read down the page I linked, it has some basic information as well as a link to their statutory residency test guide/rules.