# Renting out house in UK



## jljarvis (Sep 26, 2016)

Could anyone advise me please? 
My daughter is resident in Italy and would like to buy a small house in the UK to rent out, both for an income and thinking ahead for when she eventually moves back to the UK. 
What are the down sides to this idea? What are the tax implications both in the UK and here in Italy? 
Thank you
(Sorry I dont understand tags,)


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## Stevesolar (Dec 21, 2012)

jljarvis said:


> Could anyone advise me please?
> My daughter is resident in Italy and would like to buy a small house in the UK to rent out, both for an income and thinking ahead for when she eventually moves back to the UK.
> What are the down sides to this idea? What are the tax implications both in the UK and here in Italy?
> Thank you
> (Sorry I dont understand tags,)


Hi,
Is she a cash buyer - or does she need a UK mortgage?
Might be tricky to get a UK mortgage for a buy to let - for a non-resident.
Tax implications - you need advice in both countries to get that properly sorted.
Otherwise - sounds like a good idea, if she intends to move back eventually.
Cheers
Steve


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## Bevdeforges (Nov 16, 2007)

Speaking in very general terms, taxwise, you normally pay taxes on "real property" (i.e. building and land) to the country where the property is located. This (usually) includes income taxes, though you may well have to declare the income in both your country of residence and the country where the property is located. There should be a UK-Italy tax treaty that indicates how to avoid double taxation on this type of transaction.
Cheers,
Bev


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## jljarvis (Sep 26, 2016)

Bevdeforges said:


> Speaking in very general terms, taxwise, you normally pay taxes on "real property" (i.e. building and land) to the country where the property is located. This (usually) includes income taxes, though you may well have to declare the income in both your country of residence and the country where the property is located. There should be a UK-Italy tax treaty that indicates how to avoid double taxation on this type of transaction.
> Cheers,
> Bev


Thank you Bev, yes someone said we would have to pay tax in the UK AND Italy which would make it non viable, will see if I can find something about UK / Italy treaty
. Isnt everything complicated!!


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## GeordieBorn (Jul 15, 2016)

I suspect it is a little more straightforward... but not quite sure... I think you would pay whatever tax in the UK usin their calculation i.e. £11,500 allowance and taxed on what is above that, THEN italy would calculate their tax, deduct that paid to the UK and charge you 23%+ on the remainder... Best of luck! Would be more than happy for others to question/clarify this further


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## jljarvis (Sep 26, 2016)

GeordieBorn said:


> I suspect it is a little more straightforward... but not quite sure... I think you would pay whatever tax in the UK usin their calculation i.e. £11,500 allowance and taxed on what is above that, THEN italy would calculate their tax, deduct that paid to the UK and charge you 23%+ on the remainder... Best of luck! Would be more than happy for others to question/clarify this further


Thanks. Thats happy news . Do you think you get a UK tax free allowance if you are resident in Italy?


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## Stevesolar (Dec 21, 2012)

jljarvis said:


> Thanks. Thats happy news . Do you think you get a UK tax free allowance if you are resident in Italy?


Hi,
Yes - non-resident Brits still get the UK tax free allowance (strangely!!)
Cheers
Steve


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## GeordieBorn (Jul 15, 2016)

Well I do not really see it as good news as it implies you would pay more by being in Italy! Earn €10,000 rent in the UK with no other income and you pay no tax…. However if you are living in Italy at the time, tax resident and declare the UK income, then you will pay 23% tax in Italy. Just 5000 above that and 28% kicks in.


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## jljarvis (Sep 26, 2016)

GeordieBorn said:


> Well I do not really see it as good news as it implies you would pay more by being in Italy! Earn €10,000 rent in the UK with no other income and you pay no tax…. However if you are living in Italy at the time, tax resident and declare the UK income, then you will pay 23% tax in Italy. Just 5000 above that and 28% kicks in.


Well, thats true but its better than paying tax in the UK as well!


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