Just looking for some help on at a foreign property rental income. Its within the EEA, I cannot see any withholding tax at source. I am not sure yet whether the income is remitted or not, does this make a difference to how its treated? Owner is UK resident and tax payer.
When working out the GBP equivalent (income and expenditure is in EUR), at what point to we take the FX rate from? The date the income/expense is incurred? Or when amount remitted to UK or other?
I am currently trying to ascertain whether it will be classed as a furnished property rental, the only issue they may have is the occupancy levels.
Hi Lyndsey
Without meaning to sound rude - is this something that your PII covers? (or your prof body membership). Just a thought as foreign tax and such can be extremely complex, even when it looks simple at the outset.
I am not sure what you mean by 'cannot see' any WHT.
EEA is broad - country specific taxes come into play and not all are eligble for relief.
Also I think the rules for FHL (if thats what you mean) are slightly different outwith the UK although not totally sure given all the recent changes.
FX rate is not the date of income receipt but the date rent is due. Expenses as incurred.
Quite a lot of unknowns here.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Hi sorry I didn't make it clear. Was posting late. I've made it clear that I will only deal with the UK side of the tax. They have confirmed that they are not paying tax there (Austria). I am only completing their UK self assessment.
Hi Lyndsey
So - is this an Austrian tax avoidance situation?
What happens when the tax authorities in Austria catch up with them and then they have paid double tax? Who will deal with obtaining relief then for them?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I do need to go back to them on this I think. They have a management company dealing with this and they are getting their advice from. There may have already been tax taken from the income figures I have been given.
Thanks
Well, as they're earning income in Austria they had best make a tax return there. Assuming normal domicile rules your clients cannot choose where they pay tax which seems to be the case here but rather they have DTR available to them where tax has been paid elsewhere. In this instance they should get relief in the UK for tax paid in Austria so even if you do not complete the Austrian tax return (leaving that to a local expert of your clients choosing) you need to know how much DTR can be claimed for the self assessment.
If you really want to scare your clients inform them that if they are renting out property it is considered a business. To not pay taxes on that business at the point where the income is earned (that being where the property is located) to the rules prevelant in the local jurisdiction, in some countries will see the business (property) seized by the state.
If people want overseas income then they need to first do their homework and be prepared to handle the complexities of multi jurisdiction taxation.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
oops, two more posts since I started answering this.
This is what happenns when your trying to answer posts at the same time as doing other stuff!
My post still stands but it supports wht Joanne has stated in her last post.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Hi Shaun
Oh but you say it more eloquently than I do - I just went in for the 'must be a criminal' view (OK, I wasnt really, just taking the usual bull in a china shop stance!)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
I've just looked at the figures and they have only had a profit of just over 1000 EUR if you take into account mortgage interest & management charges. May be why they haven't paid tax (EUR 2000 0% threshold for non-dom). I still presume they need to do a return there.
Thanks for the help
Its something I would love to go into one day, specialising in tax, I did deal with a lot of DTT in my past life in investment banking.
Hi Shaun Oh but you say it more eloquently than I do - I just went in for the 'must be a criminal' view (OK, I wasnt really, just taking the usual bull in a china shop stance!)
but in the eye's of the tax authorities pretty much spot on.
Irony is that this is in principle what big business does but spend large fortunes making it avoidance rather than evasion... As if I need to tell you that, lil miss corporate banker lol. There are certain threads where us banker types take one look and its a vision of the Churchill bulldog going. Oh, no, no, no, no, no.
Right, really must go out. laters.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Shaun - I might have to get one of those nodding Churchill dogs for my car. Maybe one that can say just that - wonder if you can get that on a phone message you can just play to clients!!!! Oh we used to see loads of those 'schemes' and have many a discussion round them with the big boy Accountants. Some very inventive folk out there!!!!
Lyndsey - are you currently doing any tax studying?
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
They seem the personification of the Parento rule.... 80% of the time, 20% of the revenue!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Sole traders make up pretty much most of my clientele... I only work part-time around my family so cannot offer enough time to focus on larger companies.
I love my sole traders! To be fair they're a good bunch on the whole. I've never had to chase for paperwork near the deadline apart from one, and I never got his paperwork full stop.
Another engaged me but just never supplied ANY paperwork, including VAT returns, so I disengaged promptly, and the only other numpties were 3 non payers and 2 rather late payers.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
