3868 Double taxation on Holiday Homes Abroad ???

Did he mean the UK government or the respective foreign governments?

I was listening to his show a couple of months ago and he was ranting on about the inland revenue having just shelled out millions of pounds on digital cameras so that they could employ millions of people to go in to every house in the UK and photograph every room for the council tax re-evaluation..........

I also heard on his show that on the next census it will be mandatory to declare property abroad............

He comes out with stuff like this all the time and although I wouldn't put anything past big brother nowadays I can't help thinking that most of what he says is just a big wind up ??

I understand the only way you'd be taxed on a holiday home by the UK government is:
[list]
[*]Income generated from lettings
[*]CGT (but Prodi will get you first!)
[*]...probably about it
[/list]

That said, the Italian government are guaranteed to kiil you on taxing:
[list]
[*]Electricity
[*]ICI
[*]CGT
[*]Purchase tax
[*]etc....
[/list]

....lucky we love the place so much, eh ;)

'Income generated from lettings'

I thought that Italy taxed income from holiday homes first, so because of an agreement about double taxation it was not possible to be taxed again in England.

Anyone know if this is right?

[quote=tuscanhills]The Italian government are guaranteed to kiil you on taxing:
[LIST]
[*]Electricity
[*]ICI
[*]CGT
[*]Purchase tax
[*]etc....[/LIST]....lucky we love the place so much, eh ;)[/quote]

Just checking but isn't it the case that there's no CGT from the Itialian gov't. so long as you sell the house after 5 years of ownership? I recognise that a new government might change things but am I correct in thinking that's the situation at the moment?

Also would the Italians want to tax you on any income generated from lettings, or is that covered by the double taxation rules?

P.S By the way did you see the news in the Italian papers recently about Sardinia introducing a luxury tax on second homes and yachts !

CAGLIARI – Sardinia’s luxury tax is now law. It will have to be paid by anyone not born on the island, or who has been resident for tax purposes for less than two years, and who owns or sells villas and apartments located less than three miles from the sea, owns vessels more than fourteen metres long or lands on Sardinia in a private aircraft. The regional council approved the law by forty-two votes to twelve amid clashes, adjournments and a last-gasp attempt at filibustering by the Centre-right, which accused regional chair Renato Soru, a strong supporter of the new taxes, of “fiscal harassment”.

Well there's this but it will not bother you guys on the mainland!

Tax........... PAH!:D

Spain has always had a system that you have to declare a second home and any income from it to the Uk goverment just as if it was a UK second home.but, how many do it? Spain has 2 million empty homes!!!!!!

[QUOTE=trullomartinafranca]'Income generated from lettings'

I thought that Italy taxed income from holiday homes first, so because of an agreement about double taxation it was not possible to be taxed again in England.

Anyone know if this is right?[/QUOTE]

I actually thought that ICI was based on the rentable value of the property and you pay it whether or not the rentable value is received. Logic, although it doesn't always follow with taxation, would say that this being the case you have already paid tax in an eu country. As you say, eu rules say you can't pay tax twice (No VAT on output to EU etc).

Regards

Andy

[quote=PAS 55;33578]P.S By the way did you see the news in the Italian papers recently about Sardinia introducing a luxury tax on second homes and yachts !

CAGLIARI – Sardinia’s luxury tax is now law. It will have to be paid by anyone not born on the island, or who has been resident for tax purposes for less than two years, and who owns or sells villas and apartments located less than three miles from the sea, owns vessels more than fourteen metres long or lands on Sardinia in a private aircraft. The regional council approved the law by forty-two votes to twelve amid clashes, adjournments and a last-gasp attempt at filibustering by the Centre-right, which accused regional chair Renato Soru, a strong supporter of the new taxes, of “fiscal harassment”.

Well there's this but it will not bother you guys on the mainland![/quote]

A couple of years on from PAS 55's info on the Sardinia new tax, does anyone have any up to date figures or information about where I can look to see what the charges will be?

Thanks in anticipation of your help. I'll have a large glass of Mirto ready for when I get a response!!

Muchmirto

[quote=MuchMirto;102230]A couple of years on from PAS 55's info on the Sardinia new tax, does anyone have any up to date figures or information about where I can look to see what the charges will be?

Thanks in anticipation of your help. I'll have a large glass of Mirto ready for when I get a response!!

Muchmirto[/quote]

Yeh they scrapped the idea this year(make the mirto is well chilled).

That's great news thanks Pas, I've also just noticed that Ryanair are starting a service from Manchester to Cagliari in April, I don't know if that's news to you or relevant, but that makes two really good pieces of news to me.

I'll get the bottle of homemade stuff out of the freezer now, cheers!!

Muchmirto

Yep that also plans for 2 new airports Oristano and Castidas.

Trullomartinafranca - there is indeed a double taxation agreement between Italy and Uk which means that you don't pay the same tax twice to the 2 governments on your rental income. What you need to do is work out the tax due under the italian system and then work out the tax due under the Uk system (Let's assume that you live in the UK and you rent out your italian home when you are not there). The theory is that if you have paid tax due to the italian government you would only pay any excess due under UK rules to the Uk government should there be any. If you have paid more to the italian government than would be due under the UK regime, you cannot claim a refund from the UK . Who a person is liable to pay tax to is a matter of each individual's personal circumstances and it is well worth seeking professional advice based on your own circumstances from an accountant who is more up to speed than me on international taxation. Hope this helps

Mandy2

[quote=tuscanhills;33481]I understand the only way you'd be taxed on a holiday home by the UK government is:
[list]
[*]Income generated from lettings
[*]CGT (but Prodi will get you first!)
[*]...probably about it
[/list]
[/quote]

Or if you own the property through a company, though there are exemptions.
[url=http://www.hmrc.gov.uk/news/hol-home-abroad.htm]HM Revenue & Customs: Holiday homes abroad purchased through a company[/url]

What MuchMirto was on about was a totally different type of tax and nothing to do with rental income.It was more of a council type tax on homes within 2km of the sea and of a certain size.It had nothing to do with mainland rules just something the Sardinian government thought about and soon dropped.

This should explain it more;
Sardinian yacht tax faces challenge in court
By Peter Popham in Rome
Wednesday, 1 August 2007
The decision by Sardinia's governor Renato Soru to tax rich visitors who come to the island in large yachts or own holiday homes is being challenged in Italy's Constitutional Court.

The centre-left government of Romano Prodi says it is not opposed to the tax on principle but says its "discriminatory" nature - which would normally be termed progressive - is unconstitutional. It also fears that if the tax goes unchallenged it will encourage other regions to adapt ways of raising revenue locally, potentially clashing with the central government's plans.

Mr Soru, 49, the billionaire founder of the internet service provider Tiscali before he entered regional politics, announced the heavy new harbour dues for non-Sardinian boats last summer. It was his latest raid on the upmarket tourist economy that has brought flocks of wealthy people to the island. The most prominent is Silvio Berlusconi, whose favourite holiday home is a huge villa near Portorotondo. The marina there and the chic holiday villas around it were developed by the Aga Khan. It has become one of the glitziest watering holes in the country.

Immediately screams of pain went up from the billionaires whose floating palaces crowd the Costa Smeralda's marinas.

Daniela Santanche, an MP with the post-Fascist Alleanza Nazionale party and the owner of a yacht, said: "I am giving up my usual Sardinian holiday, all thanks to Soru and his taxes. I'll take the boat to Corsica and Sicily instead and spend only a few days in the island I love.

"It's a gesture of protest against a tax which is going to ruin the tourist industry and that of ships and ports. It's madness and a taste of what we can expect with the left in government."

The new tax was announced weeks after Mr Soru said he was putting a 20 per cent tax on the buying and selling of second homes within 3km (1.8 miles) of the sea. Both levies are consistent with his strategy of protecting Sardinia's superb coastline from further development.

His first act in power was to ban all new building within 2km of the coast. "This is a measure," he said at the time, "that will protect Sardinia and Sardinians for the next 500 years."

Defending his tax on rich visitors, Mr Soru said: "The contribution we are asking for is less than one day of fuel for a boat of that kind. It's not a tax on luxury as such: we don't tax all luxury items. If you go into a restaurant in Sardinia it can cost €5,000 for a meal - and not because there's any kind of a tax imposed by the region."

Regarding the tax on second homes, he said it was fair to ask for a "rather modest" tax contribution from home-owners who only visited their properties for a few weeks a year.

He said 25 per cent of revenue raised would be spent on environmental protection, and the rest on developing the largely empty, sparsely populated interior.