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TonyTax
TonyTax, Tax Consultant
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HI Myself and my husband are living in England for 4 jears

Resolved Question:

HI Myself and my husband are living in England for 4 jears now
we have the Belgium nationality
In the next 2 years we are hoping to move to Spain
As for our income in Spain : that would be the rend that we recieve from our 3 small properties in England
that would be a total off about 14500 pounds a year
that is without the costs off agency
will we have to pay tax and national ins. in England
i know England has a agreement with spain about tax
or would your advice be better to sell our properties and invest in properties in Spain ??
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.
Hi.

I cannot advise you as to how you should invest your money or whether to sell your UK properties as I'm not allowed to do so. I'm not an expert on the Spanish tax system but if your UK rental income is taxable there, then you will be able to offset any tax you pay on that income in the UK against the Spanish tax liability on the same income under the terms of the tax treaty between the UK and Spain.

Your UK rental will remain taxable in the UK once you have left the UK, if that is what you decide to do. As Belgian nationals, you will continue to be entitled to UK personal allowances as you will see here to offset against your UK source income which will reduce or negate your UK tax liabilities depending on the level of your UK income.

As non-resident landlords, you will need to comply with the non-resident landlord scheme which you can read about here.

From 6 April 2015, gains made from the disposal of UK residential property by non-UK residents will be taxable in the UK, whereas as of now, they are not. However, whilst the detail has yet to be confirmed, it is likely that only the gain arising from 6 April 2015 to the date the property is disposed of will be taxable. The means you will need to have your UK properties valued as at 5 April 2015 since those values will become your cost for Capital Gains Tax purposes. You can see the government consultation document on the subject here.

I hope this helps but let me know if you have any further questions.
Customer: replied 3 years ago.

Hi


thank you for your reply


as i understand my income as married couple would only be 14500 pounds a year witch is enough to live on as we would have no morgage etc..


so i believe we would not be taxed on that income as we dont have enough income off properties together and would not be recieving any other income ? i dont quit understand the capital tax gain properly ??


as far as i know sinds that me and husband are equal owners off properties we would be allowed to have a 10.000 pound profit each off the sale off 1 property a year before tax ? or so i have been told !!? that is only once a year that we are allowed to have this capital gain!


I know you are not allowed to say this but do you think we would be better to start selling properties now 1 every year to save ourselfs off falling for the tax money pit ?? as this money wil have to see us through our lives as we are only 50 years old now and are not expecting great pensions from Belgium or England


 

Expert:  TonyTax replied 3 years ago.
The personal tax allowance for individuals under 65 is £10,000 per annum so the first £20,000 of your annual rental profit would be tax free.

CGT is charged when you sell a property at a profit. The first £11,000 of gains made by an individual in a tax year are tax free. Unused CGT exemptions cannot be carried forward to use in a later tax year.

Nobody can tell what tax rules will be in place in the future nor where property prices are going so I really cannot tell you whether to start selling up. What you might consider doing is reducing your mortgages if you have any by using the net of tax rental income.

I'd recommend that you go to see an independent financial adviser if you want a plan for the future as you are still relatively young.
Expert:  TonyTax replied 3 years ago.
I have to go out for a while but I will be back a little later today.
TonyTax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

 


HI


will we have to keep paying nat.ins. as self employed ? as we will be landlords for UK properties


As for the properties we would have to work with a agency that would work with the HRMC office


all those costs off agency fees they would end up costing a few pounds in a year so if our income for the year is 14500 for both off us that would mean that we would be tax free and maybe be able to claim tax back due to agency costs and the needed repairs (if needed ) ??


Is there a list off agencies that are trust worthy and work with HRMC ??


these are just the sort off questions that keep going through our minds and cant find answers to on internet


 


thank you

Expert:  TonyTax replied 3 years ago.

You don't pay NI contribuitions on rental income.

You can deduct letting agency costs from your rental income as well as other expenses outlined here. You can also apply for exemption from having tax deducted at source from your rental income under the NRL scheme. The notes I gave you a link to for non-resident landlords sets out the criteria for a successful application.

I don't know of a list of agencies approved by HMRC but I do many operate the NRL scheme with no problems. I cannot recommend any however.

Customer: replied 3 years ago.

Hi


At the moment i do work for a retail comp. and i pay tax and NI


but i also pay a additional self employed NI as our accountant said i would have to as i own half off the properties and receive half off the rent on top off my wages


so is that incorrect as i now pay NI twice


 

Expert:  TonyTax replied 3 years ago.
It is possible to pay Class 1 NIC on income from employment and Classes 2 and 4 NIC on income from self-employment. However, you should not be paying NI on rental income unless the properties are furnished holiday lets in which case you are treated as running a business.

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