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Sam
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Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Hi, I am considering buying a flat abroad and will rent

Resolved Question:

Hi,

I am considering buying a flat abroad and will rent it out.

Will UK tax be payable on income that is kept abroad? If so, how will HMRC get to hear about it if I do not declare it?

I am a UK resident. Anticipated value of the flat is £100,000 with gross income of £10,000 pa.

Regards,

David
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi David

Thanks for your question. I am Sam and I am one of the UK tax experts here on Just Answer.

if you are a British Citizen,(you advise you are UK resident, but not whether born in the UK or its territories) then regardless of whether this rental income is brought into the UK or not, you will be liable to UK tax on it, and should alert HMRC if and when this commences. And under the double taxation treaty which allows a sharing of information between countries (so please do not think of not declaring this to HMRC) but also allows you to use any foreign tax suffered as a credit against the UK tax position (so in essence you are not taxed twice on the same income)

If you are not a British citizen then I would need a little more information such as
1) When you arrived in the UK
2) How long you plan to stay in the UK
3) Whether you are taxed under the remittance or arising basis (if you are not sure that it will be the arising basis - as to be taxed under the remittance basis you have to make an application for this)


I am due to meet with clients shortly, but will respond as soon as I return if you have any follow up questions OR are not a UK citizen - and have provided the additional information asked for.

Thanks

Sam


Customer: replied 2 years ago.

Thanks Sam,


 


Do you happen to know the threshold at which HMRC pursues tax on foreign rentals?


 


Also, are Middle Eastern banks duty bound to inform HMRC of accounts held by Britons?


 


Regards,


 


David

Expert:  Sam replied 2 years ago.
HI David

Thanks for your response

There is no threshold, if there is rental income then HMRC wish it declared - whether it generates £100 net income a year or £50,000.

You would need to check with your bank in the Middle East as to their policies - as I can only advise the tax position within the treaties, not the specific banks or their locations.

But I can advise that we do not have a tax treaty with the UAE (if this is the area to which you refer) but we do have a unilateral agreement - so you cannot rule out the fact that information is shared.

Do feel free to ask any further follow up questions, but it would be appreciated if you could rate (accept) the level of service provided, as this ensures I am credited for my time

Thanks

Sam

Sam, Accountant
Category: Tax
Satisfied Customers: 13695
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Dear Sam,


 


when I mentioned a threshold, I meant to ask whether HMRC have a threshold below which they do not bother to pursue a case because of the law of diminishing returns?


 


Regards,


David

Expert:  Sam replied 2 years ago.
Hi David

Thanks for your response

No - never (more is the pity!) as its been know them to spend more on admin and costs to pursue a debt that is less than those costs!

Thanks

Sam

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