Tax concessions on rental income from your property

gabby27 · Post by **gabby27** » Thu Sep 04, 2008 11:17 am

Dear All,

Does anyone know if you can claim any tax concessions on the income of rent from a property. We have raised our mortgage on our UK property to purchase one in carvoiero and wondered if we can claim mortgage tax relief if the mortgage is not on the property itself.
Also do we have to pay tax in portugal as well as the uk.
This is all new to us and would be very grateful for any help or advise.
Many thanks
Sue

e-richard · Post by **e-richard** » Thu Sep 04, 2008 4:42 pm

Put very simply, you do have to pay tax in Portugal on any income generated from the rental of your property in PT regardless of where the income was created. You also have to pay tax in UK on the same income.

The rules for allowances before tax are very different in each country, but the good news is that tax paid in PT is allowed against any tax due in the UK. Any mortgage interest would probably be the subject of your UK tax return.

Frankly the best advice I can is to consult a professional tax advisor/accountant in each territory or if you're lucky, someone with intimate knowledge of both.

The bad news as far as I know, sadly, is that the cost of this advice is not deductible in PT

pato · Post by **pato** » Sat Sep 20, 2008 10:42 pm

You either pay tax in the UK or tax in Potugal, not in both

bazza · Post by **bazza** » Sun Sep 21, 2008 12:41 am

I dont think you are quite right Pato.Tax will be paid on rental income in Portugal. And will have to be declared in UK, then the double taxation agreement between PT & UK comes into operation. hope i am right in saying this.

Bruce Wallis · Post by **Bruce Wallis** » Sun Sep 21, 2008 10:38 am

My understanding is that you only pay UK tax on money you import from Portugal.

I for one have never been able to bring any money back to the UK. Last time I had a bit of money....the villa needed painting

Mike Banks · Post by **Mike Banks** » Mon Sep 22, 2008 12:51 pm

Tax on income in Portugal is taxable in Portugal, but the same income also needs to be declared for tax in the UK. HM Revenue & Customs will calculate the UK tax liability on this, and offset against it, the Portuguese tax previously paid. If the UK tax figure is greater than what was paid in Portugal, you will be liable to pay the difference in the UK. It makes no difference whether you leave money in Portugal, or transfer it to the UK.

As far as the mortgage interest is concerned, there is no longer any tax relief in UK on this.