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UK rental income


slowfox05
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UK rental income is definitely taxable in the UK, not in France. The net figure in used in France with your other income, solely to determine which tax bracket you will pay any tax which is chargeable in France.

We were advised to enter both gross rent and expenses to show how net was arrived at, but at the end of the day it is a six or two-threes, in that it is the net figure which is the one the French are interested in.
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Hello frexpt.  Thanks for your input.

Unfortunately I have to disagree with your statement "UK rental income is definitely taxable in the UK, not in France.".

If you are registered in UK as an overseas landlord, then provided that you have spent more than six months of the UK tax year overseas, or outside the UK, then UK rental income is not taxed in UK, but is taxed in the country of your tax residence.

Thus if you are tax resident in France, UK rental is taxable in France if you are registered with the UK authorities as an overseas landlord.

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Well, David, we have to disagree with your remarks. UK rents are potentially taxable in the UK (if below the personal allowance then in fact no tax). It is nothing to do with being an overseas landlord - that merely means that if above a given figure (last time I looked it was £100 per week per owner, so £200 a week if owned jointly by a couple) then tax must be deducted by tenant or agent. This tax is potentially repayable and after a while, usually, one can get a letter stating that the tax need not be deducted any more.

We have been in this position for over 15 years. Our rent does not actually attract tax in the UK as it is below our joint personal allowance but we still fill in tax form. In France the net figure is used to calculate tax rate - as stated above.

Can you tell us what authority (e.g. accoutant or a book etc) you say what you do please?
Thank you

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The post by david above refers, and his link is relevant

In UK I filed to receive rent in full, or gross without deduction of income tax by either the tenant or letting agent, by means of form NRL1i for non resident landlord.

For the UK tax year 2017/2018 I then completed forms SA109 and SA105 and submitted them to UK Inland Revenue.  After checking the forms they sent me a certificate to advise that as I had spent longer than 6 months out of the UK during the tax year, then I was exempt from paying UK tax, and that the tax must instead be paid in my country of residence which was France.

This was confirmed by my UK accountant and also by my financial advisor in UK.

All is explained on the Inland Revenue site through the link given by david above.

I have been living in France since 2003, and have been a French tax resident since 2004.  Since then I have not paid any UK tax, all tax on pensions etc being paid in France.  Property rental income is very new to me, and this is my first attempt to declare it in France.  It would certainly be easier for me if I paid UK tax on the rental income, but I was advised that if I said if I paid UK tax on the rental,  this would imply that I spent more than 6 months in the UK, and then I would become a UK tax resident for all matters.  I presume that this would then lose us our medical cover in France.

It is all very complicated to me, and I am definitely not a tax expert.

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I looked at that link you gave and this is what it states:

Rental income

You need to pay tax on your rental income if you rent out a property in the UK.

You may also need to pay tax if you make a gain when you sell property or land in the UK.

If you live abroad for 6 months or more per year, you’re classed as a ‘non-resident landlord’ by HM Revenue and Customs (HMRC) - even if you’re a UK resident for tax purposes.

How you pay tax

You can get your rent either:

  • in full and pay tax through Self Assessment - if HMRC allows you to do this
  • with tax already deducted by your letting agent or tenant

Get your rent in full

If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.

-------------------------------------------------------------------------------

Tax is complicated, and certain pensions (ie government pensions)  have to be paid in their country of origin.

Rent as it states, is different, and your tennant or agent could keep 20% of your rent to pay HMRC as you are an overseas landlord. And I was told that by HMRC when I had considered doing that, and it states that on your link.

The thing is that you still get, as far as I am aware, a tax allowance in the UK, so maybe your rent would be less than that which would mean that you would not pay anything on your rental income. Is that what you mean??

But as this income will boost your general income, will you have to pay in France????

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Hereford and I and others above are 100% correct, David is either mistaken or has been ill-informed. I've relied on (consistent) professional advice both of my former UK accountant and our accountant here in France, along with clear direction initially from HMRC. I'll say it once more, irrespective of your country of tax residence, UK property income is taxed in the UK, though is declarable in France.

There may be some confusion around the term Non-resident Landlord, which simply means that unless you apply for exemption (which I did - without difficulty - it's a formality as long as your UK tax affairs are clean and all payments have been on time), in theory your tenants would be obliged to deduct tax from their rental payments before handing them over to you, then they would have to forward the tax payments to HMRC on your behalf. This has nothing to do with where you pay the tax, simply how it is collected......
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I can see that David was advised that he would be French tax resident some time ago, but this apparently is his first time declaring rental income.

Whereas, he may be liable to French tax on pension income, as in the past, I don't think he has appreciated that UK rental income will be dealt with in the UK.

The Non-Resident Landlords' Scheme is a bit of a red herring here and it really only helps determine whether tax is deducted at source or paid through self assessment ..... but, either way, always in the UK
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"The Non-Resident Landlords' Scheme"
Thanks for the explanation frexpt. We knew about this when we first rented out our UK house, but I was rather confused about it, as husband (I ) had completed self assessment for him for several years.
The main thing being we had declared our liability for tax assessment on property to the HMRC.

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[quote user="maxap"]frexpt:

You mentioned above that your uk rental income were above 15000. Which box did you use to declare the amount, please?[/quote]

Form 2044 Boxes 211/215 for gross income. Boxes 221 - 263 for deductions and calculation. Carry numbers forward to boxes 400, 410 and 420 on back page.

Box 420 total to be carried forward to box 4BL on Form 2042K endorsed "Royaume Uni".

Finally, same figure to sections 4 and 6 of Form 2047K.

Hope that helps.

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"Why is David talking about David as though he is a different person who is agreeing with his mis-interpretation of the law?"

Two different Davids, one David and the other david.

David would not agree with the term "mis-representation of the law".

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Thanks for the information on this. Am I right in thinking that the forms no longer have the suffix k as I can't seem to find any called that. They seem to be plain 2042  and 2047. Also does anyone know how Stocks and Shares ISAs are taxed here? Particularly is the relief of 65% still available for length of ownership if the investment was bought before 2018? Also where does it go on this plethora of forms?!

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[quote user="Charlie"]Thanks for the information on this. Am I right in thinking that the forms no longer have the suffix k as I can't seem to find any called that. They seem to be plain 2042  and 2047. Also does anyone know how Stocks and Shares ISAs are taxed here? Particularly is the relief of 65% still available for length of ownership if the investment was bought before 2018? Also where does it go on this plethora of forms?!

[/quote]

The 2042 K is simply the 2042 which is (part) completed by the tax office before it is sent out.

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