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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13997
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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70, based in Mauritania, live half-time in the UK,

Resolved Question:

I'm British, 70, based in Mauritania, live half-time in the UK, non-resident so far. I have one rental flat in Spain, one in Paris, one in UK let ehen I'm away. Both flats abroad pay 20 percent tax. What eould the incidence be on my UK income tax if I become resident?
Submitted: 27 days ago.
Category: Tax
Expert:  Sam replied 27 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 27 days ago.

Hi

Thanks for your patience

if you became resident in the U|K then you would be liable to UK tax on all the rentals as you would have to declare your worldwide income, however any Spanish or French tax suffered could be offset against the UK tax position under the double taxation agreements we have with both of these countries and then any UK income arising would also be considered as part of your UK tax position from which the first £11,500 (as long as your income is less than £100,000) is tax free then the next £11,500 at 40% tax

let me know if I can assist further

Thanks

Sam

Customer: replied 27 days ago.
This site is irritating. I couldn't find how to answer. So far you have told me what the gov.co.uk site says, but what do you mean bu "offset"? Would I have to pay tax on the whole amount then hope I got something back? E.g. Assume 15k + 13K euros, i.e. Approx. £24K plus say £10K Uk rent, how much tax would I be paying? How much is the offset? Is it assured?
Expert:  Sam replied 27 days ago.

HI

I haven't just told you what the HMRC site says - I have advised you how your UK tax position would be if you became resident again in the UK - which is what you had asked for ! (You stated I'm British, 70, based in Mauritania, live half-time in the UK, non-resident so far. I have one rental flat in Spain, one in Paris, one in UK let ehen I'm away. Both flats abroad pay 20 percent tax. What eould the incidence be on my UK income tax if I become resident?)

BY offset I mean say with all your incomes HMRC stated you owed £2000 but you had suffered £1500 (when converted to sterling) in French and Spanish tax - then the foreign tax deducted from the UK tax would man you would only have £500 to pay (in this example) but if the foreign income you had already paid was more than £2000 the UK tax office (HMRC) could not refund you anything back.

I don't know what the offset will be - you would know this as you advised me that you paid foreign tax on the rents already when you stated "Both flats abroad pay 20 percent tax"

But from an initial UK position if your income was 24K plus £10 K rents (not sure what the figures 15K plus 13K Euos are relevant to) this would be an annual income of £34,000 from which the first £11,500 would be tax free leaving £22500 at 20% = £4500 UK tax due -

So any foreign tax paid, you would you declare at the same time as the foreign rental income (On a self assessment tax return for the UK tax office) and this would be used to reduce the tax bill of £4500

Thanks

Sam

Customer: replied 27 days ago.
Thanks. Sorry if I' a bit slow to understand the nitty-gritty. In your previous eesponse you said the second 11,500 was taxed at 40%, now 20%. Which is correct? Am I right in understanding that the entire tax paid abroad will be deductible from my UK income tax? I do understand I'll get no refund of tax paid abroad. So essentially my tax situation would not change... or would it? The 24K refers to foreign rent.
Expert:  Sam replied 27 days ago.

HI

Apologies but its the first £11500 is tax free as these are your personal tax allowances then the next £33500 at 20% (not £11,500 at 40%)

Thanks

Sam

Customer: replied 27 days ago.
is the offset 100%, so in fact tax would only be on the UK income?
Expert:  Sam replied 27 days ago.

Hi

The offset is 100% if its less than the UK tax due

Thanks

Sam

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Customer: replied 27 days ago.
Thank you.