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-   -   Dual European Citizenship - benefits? (https://britishexpats.com/forum/europe-55/dual-european-citizenship-benefits-850638/)

mah88 Jan 13th 2015 11:20 am

Dual European Citizenship - benefits?
 
Hey everyone. I am British but able to apply for citizenship in another European country. It would be partly for my family heritage, but I was also wondering are there any benefits of having dual citizenship in 2 European countries? Do you get 2 pensions for example? Thanks!

dmu Jan 13th 2015 12:08 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11531712)
Hey everyone. I am British but able to apply for citizenship in another European country. It would be partly for my family heritage, but I was also wondering are there any benefits of having dual citizenship in 2 European countries? Do you get 2 pensions for example? Thanks!

Hi, I have dual nationality by dint of marrying a Frenchman and our two daughters are also duo. The only advantage that any of us have noticed is the difference in the cost of visas, depending on where you're travelling. And the fact that you've got a second Passport when the other one is being renewed.
But quite honestly, the paperwork, time spent and cost of having a second Passport isn't worth it....
If you haven't got an EU spouse and are applying for citizenship by naturalisation, you should enquire at your local Town Hall.
Your Pension(s) come from the country/countries where you have contributed, it's nothing to do with citizenship/nationality.
If the country in question has its own Forum, then I should post again, or at least mention the country in this Europe section. The rules may differ in each country and those who have done this are best placed to advise...
P.S. Have just noticed that you have posted on the Spain forum. You should repost there, as there'll be more members in the know.

JAJ Jan 15th 2015 3:46 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11531712)
Hey everyone. I am British but able to apply for citizenship in another European country. It would be partly for my family heritage, but I was also wondering are there any benefits of having dual citizenship in 2 European countries? Do you get 2 pensions for example? Thanks!

Some discussion of the issues, pros/cons, etc.
Acquiring Another EU State Citizenship : British Expat Wiki

mah88 Jan 15th 2015 12:15 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by dmu (Post 11531754)
Hi, I have dual nationality by dint of marrying a Frenchman and our two daughters are also duo. The only advantage that any of us have noticed is the difference in the cost of visas, depending on where you're travelling. And the fact that you've got a second Passport when the other one is being renewed.
But quite honestly, the paperwork, time spent and cost of having a second Passport isn't worth it....
If you haven't got an EU spouse and are applying for citizenship by naturalisation, you should enquire at your local Town Hall.
Your Pension(s) come from the country/countries where you have contributed, it's nothing to do with citizenship/nationality.
If the country in question has its own Forum, then I should post again, or at least mention the country in this Europe section. The rules may differ in each country and those who have done this are best placed to advise...
P.S. Have just noticed that you have posted on the Spain forum. You should repost there, as there'll be more members in the know.

Hmm, I see. I think you've put me off the idea now haha, but I appreciate the info! Plus I've heard some nationalities (including my 2nd one - Maltese) tax you on properties you have around the world.

mah88 Jan 15th 2015 12:24 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by JAJ (Post 11533963)
Some discussion of the issues, pros/cons, etc.
Acquiring Another EU State Citizenship : British Expat Wiki

Thanks, this was very informative. There doesn't seem to be a lot of advantages to be honest, but I guess it's an option if the UK ever leaves the EU.

JAJ Jan 16th 2015 1:59 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11534343)
Thanks, this was very informative. There doesn't seem to be a lot of advantages to be honest, but I guess it's an option if the UK ever leaves the EU.

Although you should always be aware that the option may not be there in the future. You mention Maltese taxation - perhaps research that one further. I've not heard that Malta taxes non-resident citizens on non-Malta source income or assets. Further information may be at the Inland Revenue of Malta: https://ird.gov.mt/

But do be aware, in general, that holding the citizenship of another country involves not only rights, but actual and potential obligations. And that these obligations may be different in the future compared to now.

mah88 Jan 16th 2015 2:04 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by JAJ (Post 11535193)
Although you should always be aware that the option may not be there in the future. You mention Maltese taxation - perhaps research that one further. I've not heard that Malta taxes non-resident citizens on non-Malta source income or assets. Further information may be at the Inland Revenue of Malta: https://ird.gov.mt/

But do be aware, in general, that holding the citizenship of another country involves not only rights, but actual and potential obligations. And that these obligations may be different in the future compared to now.

Hmm, perhaps but at the moment it's not something to worry about.

As for the non-resident tax, is it not this?:
https://ird.gov.mt/services/taxrates_nr.aspx

teejaydee Jan 17th 2015 5:05 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11535203)
As for the non-resident tax, is it not this?:
https://ird.gov.mt/services/taxrates_nr.aspx

This chart shows the tax that would be payable by a non-resident (whether a Maltese citizen or not) only on income earned in Malta. For example, if a UK-resident went to Malta to do a short-term paid contract, they would pay Maltese tax at the rates shown.

Only a small number of countries tax their citizens on their worldwide income, the most notable being the United States. Malta does not do so, and so a Maltese citizen would not have to pay Maltese tax on any income from outside Malta.

mah88 Jan 17th 2015 10:51 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by teejaydee (Post 11536511)
This chart shows the tax that would be payable by a non-resident (whether a Maltese citizen or not) only on income earned in Malta. For example, if a UK-resident went to Malta to do a short-term paid contract, they would pay Maltese tax at the rates shown.

Only a small number of countries tax their citizens on their worldwide income, the most notable being the United States. Malta does not do so, and so a Maltese citizen would not have to pay Maltese tax on any income from outside Malta.

Ahh ok, thanks! So it's not true that if I were Maltese and had a property in the UK I would be taxed on it?

Although, if I rented it out I would be taxed on it, no?

teejaydee Jan 17th 2015 2:01 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11536696)
Ahh ok, thanks! So it's not true that if I were Maltese and had a property in the UK I would be taxed on it?

Although, if I rented it out I would be taxed on it, no?

If you had a house in the UK that you rented out, you would be liable to pay tax in the UK on the rental income. It does not matter whether you are living in the UK (in another house) or in Malta. This is the general rule, regardless of your citizenship.

If you rented your house in the UK and went to live in Malta, the tax payable would be calculated as being any rental income you receive less all your rental expenses. These expenses include mortgage payments. You would also receive a UK Personal Allowance. The net result is that it is unlikely you would owe much, if any, tax in the UK. As far as Malta is concerned, you would only have to pay tax there if you remitted any of your rental income to Malta. If you do not bring the income in to Malta, it is not taxable. For example, you could use the rental income to pay a UK mortgage and it therefore not be remitted to Malta. With careful tax planning, you should be able to avoid tax in both the UK and Malta.

mah88 Jan 17th 2015 10:44 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by teejaydee (Post 11536821)
If you had a house in the UK that you rented out, you would be liable to pay tax in the UK on the rental income. It does not matter whether you are living in the UK (in another house) or in Malta. This is the general rule, regardless of your citizenship.

If you rented your house in the UK and went to live in Malta, the tax payable would be calculated as being any rental income you receive less all your rental expenses. These expenses include mortgage payments. You would also receive a UK Personal Allowance. The net result is that it is unlikely you would owe much, if any, tax in the UK. As far as Malta is concerned, you would only have to pay tax there if you remitted any of your rental income to Malta. If you do not bring the income in to Malta, it is not taxable. For example, you could use the rental income to pay a UK mortgage and it therefore not be remitted to Malta. With careful tax planning, you should be able to avoid tax in both the UK and Malta.

Thanks for this. So referring the bit in bolds, if the rental income went into a British bank account as income I would not be taxed, but if it went into a Maltese bank account it would be? Is this still the case if I lived in Malta but didn't take up the Maltese citizenship?

teejaydee Jan 18th 2015 3:36 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by mah88 (Post 11537089)
Thanks for this. So referring the bit in bolds, if the rental income went into a British bank account as income I would not be taxed, but if it went into a Maltese bank account it would be? Is this still the case if I lived in Malta but didn't take up the Maltese citizenship?

Your interpretation of the content in bold is correct. If you keep the income outside of Malta, no tax is payable in Malta. This is because Malta has what is known as a "remittance-based" tax system for offshore income. Not many countries have this, and it is a big advantage because it gives opportunities to avoid paying tax. It's all quite legal of course.

It makes no difference whether you take up Maltese citizenship or not, because the same tax rules apply to residents of Malta, whether they are Maltese citizens or not.

Just to repeat the point I made in the earlier post, although you would not be liable for tax in Malta if you kept the income in a British bank account, you would be liable for UK tax. However, this too can be avoided if your net rental income (after mortgage and other expenses) is less than your UK Personal Allowance (which is around £10,000). In this calculation I am assuming you would have no other UK income on which tax has not already been paid. If you do have any such income, you need to add it to the net rent rental income. If after doing that the total is still under the UK Personal Allowance, again, no tax would be payable.

NB: For the net rental income calculation, you would need to take your annual rental income, and deduct expenses such as:
  • Rental agent fees
  • Mortgage payments
  • Wear and tear allowance
  • Cleaning
  • Visits to UK to inspect property

mah88 Jan 18th 2015 11:06 am

Re: Dual European Citizenship - benefits?
 

Originally Posted by teejaydee (Post 11537184)
Your interpretation of the content in bold is correct. If you keep the income outside of Malta, no tax is payable in Malta. This is because Malta has what is known as a "remittance-based" tax system for offshore income. Not many countries have this, and it is a big advantage because it gives opportunities to avoid paying tax. It's all quite legal of course.

It makes no difference whether you take up Maltese citizenship or not, because the same tax rules apply to residents of Malta, whether they are Maltese citizens or not.

Just to repeat the point I made in the earlier post, although you would not be liable for tax in Malta if you kept the income in a British bank account, you would be liable for UK tax. However, this too can be avoided if your net rental income (after mortgage and other expenses) is less than your UK Personal Allowance (which is around £10,000). In this calculation I am assuming you would have no other UK income on which tax has not already been paid. If you do have any such income, you need to add it to the net rent rental income. If after doing that the total is still under the UK Personal Allowance, again, no tax would be payable.

NB: For the net rental income calculation, you would need to take your annual rental income, and deduct expenses such as:
  • Rental agent fees
  • Mortgage payments
  • Wear and tear allowance
  • Cleaning
  • Visits to UK to inspect property

Ah ok, I understand now. Thanks so much cos I didn't have a clue about any of this! Very helpful :goodpost:

cyrian Jan 24th 2015 2:23 pm

Re: Dual European Citizenship - benefits?
 

Originally Posted by teejaydee (Post 11536821)
If you had a house in the UK that you rented out, you would be liable to pay tax in the UK on the rental income. It does not matter whether you are living in the UK (in another house) or in Malta. This is the general rule, regardless of your citizenship.

If you rented your house in the UK and went to live in Malta, the tax payable would be calculated as being any rental income you receive less all your rental expenses. These expenses include mortgage payments. You would also receive a UK Personal Allowance. The net result is that it is unlikely you would owe much, if any, tax in the UK. As far as Malta is concerned, you would only have to pay tax there if you remitted any of your rental income to Malta. If you do not bring the income in to Malta, it is not taxable. For example, you could use the rental income to pay a UK mortgage and it therefore not be remitted to Malta. With careful tax planning, you should be able to avoid tax in both the UK and Malta.

They are talking about removing the personal allowance for expats.
However, while it still exists, if the house is jointly owned then you could have 2 personal allowances and two CGT allowances.
There is a difference between tax residency and citizenship.

MarkInMalta May 24th 2015 12:43 am

Re: Dual European Citizenship - benefits?
 
Hi, I am a married UK citizen currently living in Malta and thinking of buying a rental property to derive some income, does anyone know how the tax situation would be calcultated - I have read that there is a 15% tax rate system - based on gross rental income - but that also one can opt for having normal tax rates applied to the rental income and that in this case different tax rates and allowances would apply.

The problem is that any examples quote enormously high rental rates - 1500 per month etc. Given the amount of money we have available for any purchase we would probably only receive around 650 Euros a month rental and I have been informed that the letting agents would take about 100 of that a month. The property would be furnished so would there be any allowance for depreciation of furniture - our purchase budget allows for around 15000 Euros worth of furniture - including fully fitted kitchen

And finally, in order to be able to rent a property out does it have to be registered for letting?


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