GordonHowe

Thanks Modicasa, it's hard to know what the situation might be when brexit does eventually happen isn't it! We just feel that we could wait for several years for it to take full effect, so we might as well at least have the adventure of the experience of living in Italy for a while in the meantime.
We'll be sure to get the right sort of contract when we are sorting out our rental property! Thanks.

MrsTeapot

A great attitude to have. Do let us know how you are getting on when you do take the plunge. Be interesting and also helpful to know. I've still not managed made the plunge, but I'm unfortunate in that my other half prefers the safety of what he knows. Might have to do that 6 months here/there as a compromise but I'd still love to know how you get on and how it affects you - living-wise - financially - these are the sort of things I need to know to help 'move things along'. He's currently using Brexit as a 'well good job we didn't' scenario.

Good luck to you both - sounds like you both have the same ideas. Keep us up to date.

Geordieborn

As long as you can afford to do what you want and not be impacted by what you spend on doing it - go for it! We did so and would never regret a moment or penny of it

teejaydee

Your UK rental income would remain taxable in the UK. You will be able to offset expenses against income so the tax to be paid is likely to be nil due to your UK personal allowance (which you would retain).

The rental income will also be taxable in Italy. There is a double tax treaty in place to ensure you do not pay tax twice (in the UK and Italy) on the same income. Therefore you can offset any UK tax paid against your Italian tax bill.

If you subsequently sell the rental property, you will have to pay UK Capital Gains Tax on the increase in value from 5th April 2015 till the date of sale. This is a new tax, which came in to force on 6th April 2015.

Brexit is unlikely to have any effect, as tax treaties are already in force and are not under the jurisdiction of the EU.

Capo Boi

'Your UK rental income would remain taxable in the UK. You will be able to offset expenses against income so the tax to be paid is likely to be nil due to your UK personal allowance (which you would retain).

The rental income will also be taxable in Italy. There is a double tax treaty in place to ensure you do not pay tax twice (in the UK and Italy) on the same income. Therefore you can offset any UK tax paid against your Italian tax bill.'

This is all true but the problem is that the personal allowance has no relevance in Italy (and as such if no UK tax is paid the double taxation treaty is not applicable...nothing on nothing is nothing).The 'net rental income (hopefully not the gross number but a grey area) is taxable in Italy. So for example, £10000 net rental income in the U.K. Nothing to pay after personal allowance. But in Italy the £10000 should be declared and is taxable at 23% and since no UK tax has been paid nothing to offset.

GeorgeYoung

My understanding on rental income is the same as Capo Boi's. I rent out a house in the UK and my Italian accountant tells me to declare that in the UK, off-setting whatever I can (fewer things are scaricabili here) and then declaring the net profit to the Italian authorities.