This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Dual Residency UK and Italy

jheath
Posts:2
Joined:Thu Jan 25, 2018 7:46 pm
Dual Residency UK and Italy

Postby jheath » Thu Jan 25, 2018 8:27 pm

Hi,

I am living part time in the UK and part time in Italy.
I have spent more than 183 days in Italy and more than 91 days in the UK.
I have a permanent home in each country available to me all the time. I own the home in Italy.
I have income as a Company Director in the UK (just a few thousand pounds) and investment income from the UK and interest from UK bank accounts.
I have no income or investments in Italy.

I've been through the UK statutory residence test and I don't fulfill any of the automatic overseas tests or automatic UK tests. Therefore, it comes down to the sufficient ties tests.
I don't have any family ties. I meet the accommodation test. I have spent more than 90 days in the UK for each of the past 2 years. I probably meet the working 40 days in the UK test too. So I definitely meet 2 of the sufficient ties tests.

I believe this means that I am dual resident in the UK and Italy.

Under the DTA - I have a home in both countries and I think my centre of vital interests is the UK - I'm still not sure what is taken into account for this but I'm registered with doctor, dentist etc in UK, all my income is from the UK, I'm the Director of a UK company, all my investments are in the UK.

So I believe that means I am tax resident in the UK.

(I am not sure whether I have misunderstood this as there are many sites which claim that if I spend more than 183 days in Italy I am tax resident in Italy and the DTA doesn't come into it.)

As I have no income at all in Italy, do I need to fill in a tax return in Italy? (I know there is some strange thing in Italy about perceived income on property you own even if you are not renting it out). Do I fill in the return as a tax resident? I.e. do I have to pay tax to Italy on my total wealth? I don't really understand what the DTA means - does it just mean that I don't have to pay the tax on my UK income again to Italy, but I do have to pay all the other Italian taxes which would be due if I was only resident in Italy?

Thanks for any help.

jheath
Posts:2
Joined:Thu Jan 25, 2018 7:46 pm

Re: Dual Residency UK and Italy

Postby jheath » Fri Jan 26, 2018 4:49 pm

Having read a lot more, I think I now understand that as long as the UK and Italy agree that I am resident under the DTA in the UK (I understand this might not be straightforward), I should report my income and gains in Italy as though I am non-resident there. I hope I have understood this correctly.

I think this means that I need to fill in a tax return in Italy and just declare the nominal rentable value of my house there as I have no other income in Italy.

Does that sound correct?

GlobalTaxAdviser
Posts:633
Joined:Fri Dec 05, 2014 1:18 am

Re: Dual Residency UK and Italy

Postby GlobalTaxAdviser » Fri Jan 26, 2018 5:33 pm

Your situation is complex and there are lots of issues

Basically if you are resident in both countries then the Tie Breaker in the DTA will determine primary tax rights and which country will get the tax credit for the double tax. Difficult to tell where you are resident if one or both countries.

I would strongly advise that you meet a tax consultant who specialises with international tax matters

Kind Regards

GTA

JonathanG
Posts:1
Joined:Sat Mar 02, 2019 8:30 am

Re: Dual Residency UK and Italy

Postby JonathanG » Sat Mar 02, 2019 8:34 am

Hi JHeath
Did you get resolution on this matter (my circumstances are almost identical)

Thanks
Jon

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Dual Residency UK and Italy

Postby maths » Sun Mar 03, 2019 2:29 pm

heath makes no reference to his nationality which is one of the factors used to resolve dual residence under a DTA.

What is yours Jonathan?

sophiaroseseymour
Posts:1
Joined:Wed Feb 26, 2020 9:07 pm

Re: Dual Residency UK and Italy

Postby sophiaroseseymour » Wed Feb 26, 2020 10:42 pm

Hello -I have exactly the same critera as the above however I do gain some income from renting my private property income in Italy, to summarise:
I am living part time in the UK and part time in Italy.
I have spent more than 183 days in Italy and more than 170 days in the UK.
I have a permanent home in each country available to me all the time. I own the home in Italy and I rent in the UK but also have my parents home as a base.
I have income as a Company Director in the UK (just a few thousand pounds)
I have income in Italy from holiday lets on the property that I own.
Can i get dual residency and not loose my resident status in Italy which protects me post brexit?
Importantly how do I apply for dual residency (if that is the term?) and what are the conditions?
Thank you

hendersontax
Posts:33
Joined:Wed Jun 19, 2019 5:04 pm
Location:Manchester
Contact:

Re: Dual Residency UK and Italy

Postby hendersontax » Fri Feb 28, 2020 6:49 pm

Hi
You will need to seek separate advice from Italy to understand your tax residence status there. From a UK perspective, you'll almost certainly be tax resident in the UK under the Statutory Residence Test. To be 'dual resident' in your case means that you will be treated as resident in Italy under Italian law and at the same time resident in UK under UK law. It is not something you apply for, it is a question of fact. You must then consider where you are resident for the purposes of the double tax agreement between the UK and Italy, which considers where you have your permanent homes, centre of vital interests, etc. This all concerns where your income is taxed. It's not clear what 'protection' you are are referring to by virtue of your status in Italy, but in any case you will need to seek advice in Italy for that.
Hope that helps, but if you need any further support from a UK perspective then please get in touch directly.
Thanks
Tom
Tom Henderson ATT(Fellow) CTA
tom@henderson.tax
henderson.tax

UKandItaly
Posts:1
Joined:Fri Dec 18, 2020 7:07 am

Re: Dual Residency UK and Italy

Postby UKandItaly » Fri Dec 18, 2020 7:13 am

Hello All,
I work in the UK, have a permanent home there, and spend more than 90 days per year there and have checked with a tax advisor that I meet the Statutory Residence Test.
As I work from home mainly and my family is Italian, I spend more than six months a year in Italy even though I am employed full time in the UK.
I do have residency in Italy as well, at my wife's house.
I pay my income tax in the UK, but not in Italy. Is that correct?
Many thanks
Adam

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Dual Residency UK and Italy

Postby maths » Fri Dec 18, 2020 3:41 pm

Under which of the tests in the UK have you been advised that you qualify as UK resident?

Assuming you are UK and Italian resident then this dual residence needs to be resolved under the DTA. If the resolution is in favour of Italy then you will not be exposed to. UK income tax on you salary assuming you work for less than 183 days in the UK tax year.

If the resolution is in favour of the UK (which seems unlikely) then you will be exposed to UK income tax on your salary.

Prima facie, you will be exposed to Italian tax.

tiengodue
Posts:29
Joined:Sat Sep 05, 2020 10:01 am

Re: Dual Residency UK and Italy

Postby tiengodue » Wed Dec 23, 2020 5:12 pm

a thing i do not understand, is it up to the tax payer to ascertain his residence status under the tie-breaker rules of the relevant DTA?
If someone does not have uk income and interprets the DTA as being foreign tax resident then technically he does not need to file a SA.
But then how does one check if their intepretation is correct if no SA is filed?


Return to “International Tax”