I've lived in the UK since 2005 and don't have any income outside of the UK.
Alessandra, thank you for your prompt reply.Basically, as a UK resident for tax purposes, you are taxed on your worldwide income and gains. You have lived in the UK since 2005.You can buy a property anywhere in the world. Any income you get from that property would be chargeable to UK income tax. The same would apply to any gain you make on it when you sell it.Having said that, you claim foreign tax credit relief against UK tax for any tax suffered on that income overseas. In your case, if you were to buy a property in Italy and get rental income on it that is taxed in Italy, you would be able to claim Foreign tax credit relief against tax suffered in Italy.
I hope this is helpful and answers your question.
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that helps. So would foreign tax relief cover 100% of the taxes that I would pay in the UK and would I have to pay both and get the tax relief at the end of year in the tax return.
Also how can I find out what tax I would have to pay in italy?
Alessandra, thank you for your replyIn the UK, you would report your property income in Itlay (if any) by completing the supplementary pages SA106 - foreign income and gains to the main tax return.You would report any foreign tax suffered on this income by completing the relevant sections of SA106.HMRC would calculate what additional tax is payable if any on that income when you file your tax return. You would pay to HMRC tax based on UK tax calculation less tax already paid in Italy.More information on foreign income and foreign tax credit relief can be found here
Your second question is how to find out what tax is payable in Italy. I am a UK tax expert and my expertise does not cover Italian tax.You may find this link helpful.http://liguria.angloinfo.com/information/money/income-tax/