I'm a UK citizen living in California, USA, with a rental property in the UK generating around 9600 GBP annually through a letting agent.

Under the Inland Revenue Non-Resident Landlord Scheme, the letting agency doesn't deduct income taxes. Instead, I declare the rental income and expenses on my US federal and state taxes.

I am also considering obtaining US citizenship before I move to Berlin for a job that pays an annual salary of 90k to 100k Euros. After relocating, I’ll continue to file taxes with the IRS, hopefully avoiding double taxation.

Questions - my questions are naive and foundational.

1. As Germany will be my host country and I am part of the UK Non-Resident Landlord Scheme, I assume that I pay taxes in Germany on the rental income instead?

2. If I exit the UK Non-Resident Landlord Scheme and instead have rental tax deducted in the UK, would I still be required to pay taxes on my rental income in Germany too?

US citizenship(or green card) outside US implies tax complications. You'll find it very hard to access any financial services in Europe.
1. Your tax liability for UK rent goes in this order, UK>USA>DE. How much to who will depend on tax treaties between these 3 countries
2. see 1. , you forgot to include US

Moving out of US doesnt free you from US tax liabilities. One of main reasons European financial institution wont touch you.
Your UK rent income will eventually reach tax free threshold of £12.7k, then you'll have to do self assessment. Not increasing rent to avoid SA would be silly waste of money.

You'll still have to do the same as you do now (i.e. complete the UK tax return each year as a NRL, and also declare the rental income on your US tax return). The UK will still be where you're taxed on that income first, as that's where the property is located and the income is earned.

You are unlikely to have to pay tax on such a small amount in Germany though, given the tax treaties, just as you don't pay it now in the US.

Thank you for that. Ermmm, for the past 15 years I never completed a UK tax return, I did not know I had to.

Did your management company not tell you? It's on all the info about NRL's, and your management company should sent you info each year for your UK tax return, so not sure how you weren't made aware tbh. You can check it here - https://www.gov.uk/check-if-you-need-tax-return

Did you complete a P85 when you left the UK so HMRC have your US address? If so I'm surprised they haven't sent you the usual annual reminders there.

Being a NRL doesn't mean you're not liable for tax in the UK, that's still the place that has first dibs on your property income. You probably won't have any to pay if you've always earned under the personal allowance (assuming no other income from UK sources of course), but you still need to report it to HMRC. When you log in to your tax account, what does it say there?

My letting agency did not inform me that I need to complete a yearly UK tax return.

I don’t recall filling out a P85 form when I left the UK; my memory from that era is somewhat hazy.

In 2010, the Inland Revenue sent to my US address a letter approving my NRL application.

Subsequently, the IR then sent me a cheque for a refund of my PAYE taxes, I suspect this means I did not complete the P85.

Currently, my rental monthly gross income is £865. After deducting the letting agency’s gross fee of £129, I wonder if this is why the Inland Revenue hasn’t contacted me—perhaps I’m staying under the personal allowance? (assuming it works that way) I have historically kept my rent low as I like my long-term tenants, they take care of the property, no stress on my end. I typically have increased the rent by £30 every 2 years. I have no other UK income.

Over the past two years, I renewed my UK passport and corresponded with the Dept for Work & Pensions, they know I am out here in the USA.

Regarding my tax account, I never created an online account. An interesting note is that when I attempted to create one with the Department for Work & Pensions in 2022 to obtain my state pension estimate, there were insufficient data points or digital history in the UK for me to proceed. Instead, I ended up calling them to obtain the estimate.

If you had a refund of taxes when you left the UK, then that sounds like you did fill in the P85. I don't think HMRC will contact you to tell you your obligations though, the onus will be on you to comply with whatever requirements there are. It may be that you don't need to fill in a tax return because of being under the personal allowance, but I thought you had to unless HMRC tells you not to. You can check it yourself here though - https://www.gov.uk/check-if-you-need-tax-return

And I'd try again to create a self assessment online account and see what that says. If you are required to fill in a tax return then you need to sort that out asap.

If you have long term tenants that you trust and that take care of your property, it might be worth doing it yourself (if your contact allows) rather than paying such a large percentage to a letting agency.

Thank you for this. It definitely is a mind twister when having UK and US citizenship (considering) and living in Germany. It is what I do not know what worries me, and how to keep staying on top of this.

I also still have a property in UK that I rent out. I have been completing a tax return each year but the rent income is below the personal allowance so I don't pay UK tax. I now also get a small company pension which still leaves my overall income below the UK personal allowance but above the Croatia personal allowance. I did email the Croatia tax office to inform them of this but had no reply. I know these treaties are in place to avoid people paying 2 lots of tax on the same income but can living in a country with more draconian tax rules mean you get penalised for living in that country?