# RW fines and taxation!



## sim0670 (Apr 20, 2009)

RW fines and taxation!
Hi all, would be interested if anyone who is resident in italy and owns rental property in the uk.?

If so, are you in the same situation as us and being fined for no disclosure of UK property in the RW section on your italian tax returns? 

If you are, please reply...

Seems unfair as we bought the rental properties over 15 years ago. The fines are based on 5% of purchase value and also tax due from rental profits. We never disclosed the houses as we didn't pay tax in UK as the accounts never incurred any profit.

The fines are excessive and unjust. 

As present we are weighing up the pros and cons of whether to go to to court. Our commercialista says we can go for mediation first with the tax office, which is an informal discussion. 

Anyone had any experience with the court system in Italy? I would imagine it is a long and drawn out process...

Constructive advice would be appreciated greatly.

Thanks for reading.

Ps for anyone who didn't know the Ivie tax which was brought in last year for overseas property has been scrapped for 2011. So any payment can be brought forward for 2012. Yet again ....Another unjust tax!


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## NickZ (Jun 26, 2009)

always start with talking to the office. No point trying the tax courts before having a chat.


My understanding which may be flawed is going to tax court requires you to post a bond based on the potential fine. On top of this you have your legal expenses.


OTOH the tax office even if you are considered liable can negotiate a lowered amount and payment terms.


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## sim0670 (Apr 20, 2009)

NickZ said:


> always start with talking to the office. No point trying the tax courts before having a chat.
> 
> 
> My understanding which may be flawed is going to tax court requires you to post a bond based on the potential fine. On top of this you have your legal expenses.
> ...


Thanks for you reply Nickz,

I know it sounds crazy but we just don't want to lie down and die on this.

The tax office have offered us deal already, for us to pay 1/3 of the original fine, the fine has to be paid in full otherwise no deal! the tax we can pay on a payment scheme with low interest.....however our commercialista is 80% convinced we should not even be paying RW fine. The documents we have from the tax office have flaws and the laws they refer to are grey in reference to overseas cross border taxation. Likewise the tax.
He has checked..
If we go to mediation we run the risk of paying 40% or even 100% of the fine if the discussion goes badly. Apparently nothing is in writing regarding these kind of meetings. Mediation has only been available for the last 10 months apparently.
The annoying part is the fine and tax bill we have at the moment is just for one year -2009. There is a high risk they will come to us with 2010 afterwards. If the amount is the same as 2009, which likely, then it is a huge problem. As with everything in Italy they can only do one thing at a time. If we pay, they we are admitting liability and then we cant not pay the second.
Our commercialista says it is almost like a test, the deal they are offering is not quite enough to initiate any court proceedings, but if we added the 2 years together it would be.
He has also said it depends on the judge on the day... From what we understand we would be pioneers in this and the judge may not have seen this situation before. On the roulette table its like putting your money on red or black!

We just wondered how the fair the justice services are in Italy? Would we get a fair crack at it, or would they just make an example of us being non Italian...
We will probably opt for mediation, however if things turn sour and then they push for the full 100% then I suppose the decision is made, we will have to fight and go to court.

Its tricky, and i cant find anyone who has been through this or even in same situation with this RW problem. 

Regards


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## sim0670 (Apr 20, 2009)

sim0670 said:


> Thanks for you reply Nickz,
> 
> I know it sounds crazy but we just don't want to lie down and die on this.
> 
> ...


Further to this issue, i have just had a response from someone on another forum, different issue, but it kind of gives us an idea of what the court system in Italy has to offer? 
They went to court in Italy with a good case, won hands down! ..... Then were told afterwards...... due to the current situation of the economy then still had to pay the fine for Italia's stability. What the........only in Italy!

We might have better odds on the roulette table after all?


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## Grasscutter (Mar 29, 2013)

*Italian Property tax*



sim0670 said:


> RW fines and taxation!
> Hi all, would be interested if anyone who is resident in italy and owns rental property in the uk.?
> 
> If so, are you in the same situation as us and being fined for no disclosure of UK property in the RW section on your italian tax returns?
> ...


Hi 0670SIM,

I own commercial property in the UK and am taxed on the net rental income and also on the original purchase. Luckily it was purchased nearly 30 years ago and the tax was based on the purchase price. My accountant informs me that in the future it may be based on the UK ratable value.

Another unjust tax is that on UK pensions. All worldwide income must be declared by residents in Italy and as I understand there are no personal allowances - all income is taxable.

Grasscutter


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## DonGiorgio (Dec 15, 2012)

I pay UK tax on both of my private UK pensions so have not declared them here i Italy. I do not have a taxable income here -yet!


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## macenza (Jan 9, 2013)

*Pension and tax*

I am sat here with zero Italian income and only a HM Forces pension which is taxed at source (UK) and the remainder wired out her to my Poste account monthly. I have an appointment next month as I have to declare this on a tax return. As far as I am aware I have to pay Italian tax on this pension even though I have already been taxed in the UK. The tax people have said that they will calculate what I have had sent over for the 12 month period Jan - Dec 2012, allow me a threshold of 2,500 euro and then tax the rest at 23%, regardless of the tax already paid in the UK. According to them I should seek a tax rebate from the UK. 

Gobsmacked to say the least


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## DonGiorgio (Dec 15, 2012)

macenza said:


> I am sat here with zero Italian income and only a HM Forces pension which is taxed at source (UK) and the remainder wired out her to my Poste account monthly. I have an appointment next month as I have to declare this on a tax return. As far as I am aware I have to pay Italian tax on this pension even though I have already been taxed in the UK. The tax people have said that they will calculate what I have had sent over for the 12 month period Jan - Dec 2012, allow me a threshold of 2,500 euro and then tax the rest at 23%, regardless of the tax already paid in the UK. According to them I should seek a tax rebate from the UK.
> 
> Gobsmacked to say the least


Not true. There is a double taxation agreement between the UK and Italy. You only have to pay tax here on Italian income.
There is acopy here: hmrc.gov.uk/taxtreaties/in-force/italy-dtc.pdf
Hope this helps. There is a lot of info on the HMRC website.


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## dgeorge (Mar 26, 2013)

This type of question regarding the IVIE tax is now rampant on the Internet. I have been trying to figure it out as well since my family is/was planning a move to Italy. In *THEORY*, the law indicates that if taxes on assets have already been paid in one country that they will not have to be paid again in Italy if the amount previously paid exceeds the amount calculated under the IVIE protocol. That *IS IN THEORY*. There are hundreds of posts out there thought, that have made it clear that although double taxation should not be allowed under the taxation agreement, it is *IN PRACTICE* being done routinely by the local tax offices in Italy. Has anyone had any luck using the double taxation argument successfully with the local Italian tax offices? Since I am an american who would like to move to Italy, I'd be interested in any other American's response...though any response would be great. Thanks!


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