½ûÂþÌìÌÃ

Hi there, as with many things in life, there are many different answers to this question, you obviously trust your accountant, his advice seems sound to me, you could save a few bob by not declaring, BUT... if you're the one who is caught, the fines and penalties involved mean it would not be worth it...
Your choice, really, good luck. :)

[QUOTE=GeorgeS]Hi there, as with many things in life, there are many different answers to this question, you obviously trust your accountant, his advice seems sound to me, you could save a few bob by not declaring, BUT... if you're the one who is caught, the fines and penalties involved mean it would not be worth it...
Your choice, really, good luck. :)[/QUOTE]

Jane and Tony

George is correct when he says listen to your accountant, but incorrect when he says you can save yourselves a few bob if you choose not to.

I assume you are UK resident and a higher rate tax payer and plan to stay so.

The UK system taxes capital gains on business assets differently compared with non business assets, insofar as the reliefs are more generous. But to be considered a business asset there must be some evidence of the fact. In this case it would be demonstrated by way of schedule A rental income declarations.

I have done a quick back of fag packet calculation to illustrate the point. Where the rental income was €24k per annum and the capital gain over five years €300k after allowing for improvements etc, taxes paid where there was full disclosure would be €36,000 less than if you did not declare.

This is why you pay your accountant what you do......

And George is also correct to point out that failure to declare earnings is against the law in the UK and Italy, and the punishments are heavy and can even lead to imprisonment.

As an accountant I regularly meet ½ûÂþÌìÌà professionals and one thing that always comes home to me time after time, is how these ½ûÂþÌìÌÃs admire the UK legal system in general, and the taxation system in particular. It is well documented that the ½ûÂþÌìÌà tax man has problems with the black economy, and people who choose not to declare. The problem is nowhere near so pronounced in the UK because they manage to incentivise the tax payer to make full disclosure, as illustrated above.

So if I were you keep listening to your accountant, and when people tell you they are operating dishonestly, more fool them!!!!

Regards

Michael Murphy

[email]michael@mjmurphyaccounts.com[/email]

[QUOTE=Jane and Tony]Hi all,

We've bought a house in [I]Tuscany[/I] as an investment, and we will rent it out when we're not using it. This seems quite common, and reading some of the threads on the forum it is clear we are not alone.

Jane and Tony

In Tuscany; my aploogies. It had been a long day!!!!

A holdiay letting outside the UK does not qualify as a trade, and therefore the capital gain would not qualify for business asset taper relief. The UK tax man is happy to give us incentives to keep our property investments well and truly in the UK!!!!

But even so it pays to keep everything well above board, because when you do come to sell all enhancement expenditure is an allowable expense when it comes to calculating the capital gain. And you still get non business asset relief!!!!

But the moral analysis is the same. Going anywhere and not declaring taxes is dishonest. But a good accountant will keep you on the straight and narrow.

Regards

Thanks Michael and George!!!

I don't know what I was thinking; it's just that many of the other expats and holiday home owners I've spoken to don't seem to be declaring anything, which all seems a bit risky really.

Hopefully our house will be ready in the spring Michael, then my UK accountant will need some help with avoiding double taxes so we'll be in touch!

Thanks again.

[QUOTE=Jane and Tony]it's just that many of the other expats and holiday home owners I've spoken to don't seem to be declaring anything, which all seems a bit risky really.[/QUOTE]

I wonder why non of [b]them[/b] replied?

J & T, have you tried the forums Search -tool because here was earlier a thread where was stated that under certain rental income figure you don't pay taxes (when it's unprofessional ie one villa or something like that) but obviously still declare the income.

[QUOTE=Jane and Tony]Thanks Michael and George!!!

I don't know what I was thinking; it's just that many of the other expats and holiday home owners I've spoken to don't seem to be declaring anything, which all seems a bit risky really.

Hopefully our house will be ready in the spring Michael, then my UK accountant will need some help with avoiding double taxes so we'll be in touch!

Thanks again.[/QUOTE]

Jane and Tony

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