I''m defined as a UK tax

11/03/2016 - 20:46

I''m defined as a UK tax resident which does not mean I live in the UK. I maintain a home in the UK which allows me this status. However, my Italian husband and I are buying a property in Italy very soon and thanks to him I am automatically entitled to permanent residence. His money will be used to buy this property, not mine.  Should I anticipate any problems with IMPS? Usually they want control of private pensions for taxation purposes which in my case does not apply. 

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From my research, you are a fiscal resident if you reside in Italy one day more than half of the year, thus you would be subject to Italian taxes on your worldwide income/assets, including your home in the UK. We do know of several people from the UK who do not pay taxes in Italy but I think that the tax man will catch up with them at some point. We are US/Italian dual citizens and this will be our situation as well.  I would recommend that you consult with a tax accountant who is well-versed in this issue but from the extensive reading that I have done as well as a recent contact I had with a tax accountant in Italy who prepares taxes for both countries, this is indeed the case.     

Being in Italy for 1 day more than half a year (183 days most years) does not automatically mean that you are definitely tax resident in Italy. You can be tax resident in both Italy and the UK under each countries domestic rules. However, under the UK/Italy double tax agreement ("DTA") you can only be resident in one country. The DTA contains a tie breaker provision with a sequential set of questions which determine which country you will be tax resident in. This depends on your personal circumstances. You should take advice from a professional who is experienced in both UK and Italian tax rules and the application of the DTA. For most it will be obvious which county you will be tax resident in, however for some there is a grey area and proper advice is necessary to avoid problems.