We bought a property in France in 2005 and have received rent income (from a lease back scheme) of about €5,000 pa. Our french accountants "do what ever they do" as far as the french tax authorities are conserned - and we have paid about €300 pa in french property tax, but nothing on the income. Our french accountants say the french authorities say it's too small an amount and they're not interested. Should I be declaring this to the UK inland revenue (I am f/t employed and resident in the UK) and if so, what can I claim to reduce the liability - maintenance fees on the property, french accounting fees etc? We financed the purchase by taking out a mortgage on our UK residence. Can we claim back the interest on that mortgage?
Country/State/Province of question: UK
Most of my tax liability is settled through PAYE - although we do have £10,000 of equities that have lost capital value. Is there anything we can do do "use" this loss to off set any income tax liability on our french property?
Thanks for your question.
You should be declaring this rental income through your UK tax, by completing a foreign income page along with self assessment.
Along with that an employment page to ensure that all income is declared.
From the rents received you can claim expenses such as interest on the mortgage used to purchase this property, maintenance fees, insurance, advertising, cleaning, accountancy fees, managing agent fees etc
As you have been receiving rental income since 2005, it could be prudent to engage an accountant/tax adviser to prepare the required tax returns for you. Be aware there could be late charges added onto any tax due - and also interest.
The losses you have made against lost value on equities can only be offset against capital gains - so this could not come to bear until the French property is sold - or you sell something else that gives rise to a capital gain. (These cannot be offset against rental income or PAYE income)
However do declare the capital losses as you can carry these forward.
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