Rent on Italian property

Morides

Hello, I am new to this Forum.  

I am originally from Italy but I am resident and domiciled in the UK. In Italy I own a share of our old family home (a third as I am one of three siblings). The house is rented out but the rent goes to my mother who does not have a proper pension, so that is the money she lives on.  I have never received any part of the rent. The 'income' therefore exists only on paper. I don't have a bank or saving account in Italy at all so I have never imported any 'income'.
My question is: do I still need to declare this rent to HMRC? I am in full time employment in the UK and pay my income tax via PAYE so I don't usually do a self assessment.
Thank you to whoever can clarify this.

OldMusicGuy

Take a look at the foreign income pages on the HMRC site here: https://www.gov.uk/tax-foreign-income/paying-tax

It clearly states "You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains."  It also covers income which is "unremittable".

On the surface it appears that you are the owner of a property from which you are receiving rent which you are then giving straight to your mother. However, is there some legal reason why your mother is entitled to receive the rent? Is she registered as the landlord? Is she paying tax on it in Italy? 

I would suggest you get some specialist advice on this. You look like you could be in breach of UK tax laws if you don't report this. 

Morides

Thank you for your reply. I had looked at the HMRC page before posting but did not (and still dont) see anything about income that is 'unremittable'. As I live and in the UK I have given my mother the legal authorisation to deal with my share of the property in Italy; she collects the rent, and pays the property taxes through an accountant over there. I will seek professional advice, thanks

GDB2222

The only thing I would add is that, if your domicile is in the UK, and you are resident here you are taxed on all your income worldwide. 

I don't think that your having given your mother authority to manage the property on your behalf makes any difference.  

As you say, a professional may be able to help. 

AdrianC

If it was all in the UK, your share of the income would be taxable, then treated as a gift to your mother.

I don't see how Italy changes that, unless Italian property law has something specific to cover that case.
If it was taxed at source in Italy, you could credit that tax against your SA.
Self-assessments always need to be done unless your tax affairs are 100% PAYE...

SonnyLumiere

Try this:
https://www.taxchambers.com/news/tax-on-overseas/#:~:text=If%20you%20are%20resident%20in,of%20the%20UK's%20property%20allowance.

sheramber

You might want to post on the Cutting Tax board where  tax queries are dealt with.

SouthLondonUser

You are resident and domiciled in the UK.

You receive some foreign income.

You decide to donate this foreign income to your mother. However, I don't see how this can possibly change the fact that, as a UK resident, you must pay taxes on all your worldwide income.

The only exception I can think of is if there is some treaty between the UK and Italy whereby this income can be taxed in Italy only.

I think you need specialist advice, from someone familiar with dual taxation in these 2 countries.