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Where Taxpayers and Advisers Meet

double taxation agreement uk italy - tie break

riccardob
Posts: 96
Joined: Sun May 29, 2011 10:02 am

double taxation agreement uk italy - tie break

Postby riccardob » Sun Aug 16, 2020 4:20 pm

Hello,

I am reading through the dual taxation agreement between the UK and Italy in relation to a italian pensions paid to a resident of the uk.

Now in terms of italian legislation, if someone is registered in the
local register of population you are a tax resident of Italy. However one is also resident of the uk if they spend more than 183 days in the UK.

So one can be a tax resident of both countries. Now this is where the tie-break
listed in the taxation agreement comes into play.

According to the tie break clause if someone has a permanent home in one state that that state 'wins' the residency. My question is, what happens if I have a permanent home in my name in Italy but my partner has a home in the UK, what should be consideted as my permanent home in the tie-break clause of the dual tax agreement?

thanks

maths
Posts: 7966
Joined: Wed Aug 06, 2008 3:25 pm

Re: double taxation agreement uk italy - tie break

Postby maths » Sun Aug 16, 2020 8:18 pm

Your permanent home is determined on the facts applicable to you, not your partner.

riccardob
Posts: 96
Joined: Sun May 29, 2011 10:02 am

Re: double taxation agreement uk italy - tie break

Postby riccardob » Sun Aug 16, 2020 9:53 pm

Your permanent home is determined on the facts applicable to you, not your partner.
Hello,

But what would be classed as a permanenent home: a house registered in your name only or also a house registered in your wife's name?

riccardob
Posts: 96
Joined: Sun May 29, 2011 10:02 am

Re: double taxation agreement uk italy - tie break

Postby riccardob » Sun Aug 16, 2020 9:59 pm

Your permanent home is determined on the facts applicable to you, not your partner.
Hello,

But what would be classed as a permanenent home: a house registered in your name only or also a house registered in your wife's name assuming you can live in both?

maths
Posts: 7966
Joined: Wed Aug 06, 2008 3:25 pm

Re: double taxation agreement uk italy - tie break

Postby maths » Tue Aug 25, 2020 4:08 pm

It is highly unlikely that your girlfriend's property would be treated under the DTA as a permanent home of yours.

bd6759
Posts: 3254
Joined: Sat Feb 01, 2014 3:26 pm

Re: double taxation agreement uk italy - tie break

Postby bd6759 » Tue Aug 25, 2020 7:29 pm

The OECD commentary on tax treaties explains this, starting at page 86

https://www.oecd.org/berlin/publikationen/43324465.pdf

You first said girlfriend. Now you say wife. There is a difference.

tiengodue
Posts: 3
Joined: Sat Sep 05, 2020 10:01 am

Re: double taxation agreement uk italy - tie break

Postby tiengodue » Fri Sep 11, 2020 9:53 pm

sorry to hijack the post but I have a question related to dual residency claims.
if one is tax treaty resident in another country, and has no uk income to report, is one still required to file a self assessment? my understanding is that if no tax to pay therefore there is no need to file a self assessment.

maths
Posts: 7966
Joined: Wed Aug 06, 2008 3:25 pm

Re: double taxation agreement uk italy - tie break

Postby maths » Sun Sep 13, 2020 1:20 pm

A person is required to file a tax return if they receive a notice from HMRC to file a tax return.

If no notice is received and no UK source income/gains arise then there is no need to notify HMRC of any liability top income tax/CGT.

Where a person is dual resident but resident in the overseas territory under a DTA tie-breaker test contained isn the DTA then strictly speaking a UK tax return is required. This would include filing the Residence etc Supplementary Pages and filling other appropriate claims (eg HS302) under which a claim would be made for tie-breaker residence overseas. Not necessarily a short process.

In practice, despite the above, it is not unusual in such circumstances assuming literally no UK source income/gains for nothing to be filled in the UK (the "sleeping dogs" approach).


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