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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 31351
Experience:  International tax
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I'm looking for confirmation that HMRC does not tax my

Customer Question

Hello, i'm looking for confirmation that HMRC does not tax my rental income in the Netherlands, as i pay local income tax in that country. Article 6 of the Double Taxation Agreement excludes HMRC for taxing this income, but there is no provision in their online self assessment to reflect this. What document should i request from whom, to confirm the above and feel safe in the knowledge that i have confirmed my interpretation ?
JA: Which tax year is this for?
Customer: 2020/2021
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: no
Submitted: 17 days ago.
Category: Tax
Expert:  TaxRobin replied 17 days ago.

If you are resident in the UK and receive rental income from an overseas property, you will be taxed on this in the UK in the same way as if the property was located in the UK under the income tax rules. The first £1000 of your income from a rental property may be tax free because of the UK's property allowance.

If a double taxation agreement gives exclusive taxing rights to the UK, then tax is only paid in the UK (and vice versa). This overrides the domestic UK law and the domestic law in the other country. So do not report as income.

If there is no double taxation agreement in place in the jurisdiction where your overseas property is, then you may still be able to get tax relief for any foreign taxes you pay against your UK tax bill through a foreign tax credit (or unilateral relief).

The foreign tax credit is the lower of (a) the foreign tax paid on the income or capital gain and (b) the UK tax liability on that same income or capital gain.

Customer: replied 17 days ago.
In this case the exclusive taxing rights are (by DTA) for the country where the property is located (Netherlands). So just to confirm, i don't submit, or even mention the Dutch rental income in my Self Assessment ?
Expert:  TaxRobin replied 17 days ago.

That is correct. If only the other country is allowed do not report that on your UK form

Customer: replied 17 days ago.
thank you. Should i make a note on the Self Assessment reflecting the overseas rental income and reference the Double Taxation Agreement giving exclusive taxing rights to the other country ? or not make any statement at all ?
Expert:  TaxRobin replied 17 days ago.

Yes you should do that