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bigduckontax
bigduckontax, Accountant
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If my wife and I have a rental property in Germany and the

Resolved Question:

If my wife and I have a rental property in Germany and the income from which is being taxed by the local German tax office. Do we have to declare anything to the UK HMRC.
Submitted: 28 days ago.
Category: Tax
Expert:  bigduckontax replied 28 days ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to ba able to help you with your question.

In which country do you reside, please?

Customer: replied 28 days ago.
UK
Customer: replied 28 days ago.
We reside in the UK
Expert:  bigduckontax replied 28 days ago.

You are taxed on your world wide income so you will have to declare this net rental on your annual self assessment tax returns.

Under the Double Taxation Convention between the UK and Germany, the same income stream cannot be taxed in both jurisdictions. This is achieved by means of tax credits, the tax paid to one country being allowed as a tax credit against liability in the other. Thus you will both have a tax credit from Germany to offset the UK liability.

I do hope that you have found my reply of assistance.

Customer: replied 28 days ago.
I would like to add that the income from the rentals does not come back to the UK but remains in Germany.
Expert:  bigduckontax replied 28 days ago.

That does not matter one iota. You are taxable on your world wide income wherever it is earned or retained.

Customer: replied 28 days ago.
Thanks for your previous answers. One last question: On the sale of a property in Germany which we've had for over ten years would we be liable to capital gain tax.
Expert:  bigduckontax replied 28 days ago.

Yes, unless it were your sole or main domestic residence.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 28 days ago.

Thank you for your support.