Tax on income received from rental of a home abroad.....

[Eve]

...has anyone any experience of this?

We are UK resident but have a house in Italy, which we have just rented out for 6 months.

Do we declare income in this country for tax? At what exchange rate? The income will stay in our bank account in Italy... so is it taxable in Italy?

Not the same as your situation, but.....I was recently told by a UK based accountant that rent was NOT taxable as long as you aren't making a profit once expenses are paid.

But, I am living outside the UK atm, and the rental property is in the UK. No idea if that is normal tax policy, or if it would apply in Italy.

Guess I might have muddied the waters with that post??

Eve, you need to speak to an Italian tax Accountant. There may well be a double taxation agreement which means the income and/or asset value is taxed either locally or here, but it can be complicated. If you have a choice you need to work out which is more advantageous.

Earlybird, that is broadly true for UK properties, although you still have to submit a return and declare it as a Non Resident Landlord. It is still technically taxable income although you may not have any liability if you do not make a net profit or one within personal allowances.

Eve- Yes you need to declare the income on your UK tax return (I am assuming you and dp own house direct and not via company or any other vehicle).

It is also likely to be taxable in Italy as well as her.e You'd need to refer to the relevant tax treaty as that will determine to see how you claim relief against whichever country doesn't have primary taxing rights.

There should be some notes about how you go about doing this on the description box relating to income from foreign properties on your tax return.