A House in the Sun?

HMRC has eyes everywhere and not just in the UK. Somebody recently got in touch, as they’d unexpectedly received a letter from HMRC about a property they are renting out overseas and have done for a while. The letter invited them to make a ‘voluntary disclosure’. Naturally, the letter was worrying, particularly as they were paying tax on the rent received on the property in the country it’s based and assumed that they’d fulfilled their obligations.

In the event, HMRC didn’t take any further action, but it is a reminder that UK residents should declare all income on a Self Assessment return, even that from abroad.

As HMRC explains:

Normally, the tax authorities of the country where the let property is situated will also charge tax on the letting profits. This means that a UK resident landlord will pay tax on the same profits both here and abroad. But the double charge is relieved by deducting the overseas tax paid on the property income from the UK tax due on the same income. This is done either under the terms of a Double Taxation Treaty with the overseas country or, where no treaty exists, under separate UK rules.

If you’ve got any questions at all, please call us on: 01892 513515.