qwerty007

My undertstanding is that you are 'liable' to UK tax on UK rental income whether you are resident or not. However, tax relief is sometimes available where two countries have a DTA (dual tax agreement). Does anyone know whether 'full' or 'partial' relief can be obtained on UK rental income, for US greencard holders and citizens?

BritGuyTN

In think that is incorrent. If you are non-resident for tax purposes in the Uk then you pay no tax.

Instead you put this gross income and any expenses like mortgage interest and insurance on your US tax return

JAJ

Remember - British citizens overseas still get a UK personal allowance, which normally reduces UK tax liability to zero (especially after you deduct rental expenses). So normally you have just US tax to worry about, unless you've a lot of real estate.

qwerty007

Really? I downloaded a pamphlet from the Inland Revenue yesterday that says personal allowances available just about everywhere except in the US. That's why I was looking at the relief angle. I guess if you've been doing that then they must accept it. Perhaps that's why they like issuing penalties for late filing so much. But with nothing to pay they can't enforce a penalty.

qwerty007

If your property is in the UK, the Inland Revenue make it clear you are still liable to income tax on income that arises from that property, regardless of whether you are resident or not. You can opt to pay it yourself at the end of the year, otherwise your agent or tenant is obliged to pay it for you. Seems incredible but there it is. I am happy for anyone to prove me wrong, because it is a bind having to file two returns each year.

You still have to put this into your US returns, which then gives you a credit for UK tax paid according to the UK/US DTA.

angelman

I have to file taxes in the UK to account for the rental income I get from my flat. Its not a big deal and when I take into account sundry expenses of maintaining property I have to pay no tax, though that may change when I start charging a real market rent (at the moment its being rented to a friend for peanuts).
This income is also declared to the US tax people but again after expenses doesnt really result in increased tax here.
I do also write off the interest on my UK mortgage on my taxes here which is good.

mmerdock

I've been living in the US for 5 years and only just found this site! Been reading it all day...!

I was unaware that you could write off the interest payments made on my UK mortgage.

What I've been doing is filing a UK self assessment every year showing the rental income I get from my tenants, deducting the mortgage interest payments and any maintenance costs and paying tax on that income which normally turns out to be zero.

Then here in the US, I just filed a standard return without mentioning my UK interests...

Now, I just went through turbotax and put my interest amount as a deduction and it claimed I would get a substantial tax refund. So now I'm interested if I should do that this year. Do I also declare the rental income and maintenance costs here? How does the currency rate work? I need to report in $$$.

Now, furthermore, can I claim more for previous years tax filings? I read on the IRS site that there is a form to fill out but I think it just said 3 years. Am I asking for trouble if I was to try and get some of that US tax money back?

Any advice appreciated!!!

Jerseygirl

I thought you could only claim in one country...not both.

Elvira

You are supposed to declare your worldwide income to the IRS if you live here. You get relief for any tax paid in the UK - that's what the dual taxation agreement is about.

But this is probably a good time to go and see an accountant to get this sorted. (And I don't mean H+R Block...)

qwerty007

I would think that if you are declaring/paying tax for rental income in the UK, a tax rebate would be unlikely in the US, but maybe you've found out some little quirky windfall. Let us know if it works

JAJ

What "pamphlet" could that be? You may be confused with something else. In any case, this is the law (from the notes for the non-resident section of the tax return, SA109):
http://www.hmrc.gov.uk/saemployees/fagsa109.shtml

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If you are not resident in the UK and you satisfy one of the
conditions listed below, you are entitled to the same allowances
and reliefs that would be available to you if you were resident in
the UK. The conditions are that:

• You are a Commonwealth citizen (which includes British citizen)

• You are a national of a state within the European Economic Area
(EEA), that is Austria, Belgium, Czech Republic, Cyprus,
Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Iceland, Ireland (Republic of), Italy, Latvia, Liechtenstein,
Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland,
Portugal, Slovak Republic, Slovenia, Spain, Sweden and UK

• You are, or have been, employed in the service of the
British Crown

• You are employed in the service of any UK missionary society

• You are employed in the service of any State under the
protection of Her Majesty

• You are resident in the Isle of Man or the Channel Islands

• You have previously resided in the UK and are resident
abroad for the sake of your health, or the health of a member of
your family living with you

• You are a widow, widower or surviving civil partner whose
late husband, wife or civil partner was in the service of the
British Crown.

If you satisfy one of the following conditions, you will need to get a
certificate from the overseas tax authority stating that you are
resident there for tax purposes for the period of the claim and,
where appropriate, have documents (for example, a passport) to
show that you are a national of that country. Keep the certificate
and documents in case they are needed later to support your claim.

The conditions are:

• you are a national of Bulgaria or Israel, or

• you are a national and a resident of Argentina, Azerbaijan,
**Belarus, Bolivia, *Bosnia-Herzegovina, China,
Côte d'Ivoire (Ivory Coast), *Croatia, Egypt, Indonesia, Japan,
Jordan, Kazakhstan, Korea, *Macedonia , Morocco, Oman,
Philippines, Romania, Russian Federation,
*Serbia and Montenegro, Sudan, Switzerland, Taiwan,
**Tajikistan, Thailand, Tunisia, Turkey, Ukraine, Uzbekistan,
Venzuela and Vietnam, or

• you are resident of Austria, Barbados, Belgium, Fiji, France,
Germany, Greece, Ireland (Republic of), Kenya, Luxembourg,
Mauritius, Myanmar (Burma), Namibia, Netherlands, Portugal,
Swaziland, Sweden, Switzerland and Zambia.

If you are a resident, but not a citizen, of Austria, Belgium, France,
Germany, Kenya, Luxembourg, Mauritius, Netherlands, Portugal,
Sweden, Switzerland and Zambia you are not entitled to personal
allowances if your income consists solely of dividends, interest and
royalties or any combination of them.

qwerty007

[QUOTE=JAJ;4337493]What "pamphlet" could that be? You may be confused with something else. In any case, this is the law (from the notes for the non-resident section of the tax return, SA109):
http://www.hmrc.gov.uk/saemployees/fagsa109.shtml

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I may well be confused with something else ...at least I hope so. You don't need to convince me anymore, as I'm easily persuaded when there is clearly a benefit in being so.