Income tax on rent, worked example, in United Kingdom
| NON-RESIDENT COUPLE (FROM AN EU/ COMMONWEALTH TERRITORY) | ||||
| Non-resident couple´s joint rental income1 | €1,500 | €6,000 | €12,000 | |
| Monthly Rental Income2 | 1,500 | 6,000 | 12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less Personal Allowance3 | (14,904) | (14,904) | (14,904) | |
| Less Costs4 | (4,054) | (16,270) | (32,830) | |
| Less Depreciation5 | (1,800) | (7,200) | (14,400) | |
| = Taxable Income | - | 33,626 | 81,866 | |
| Income Tax6 | ||||
| Up to GBP2,150 | 10% | - | 636 | 636 |
| GBP2,150 - GBP33,300 | 22% | - | 5,998 | 16,620 |
| Over GBP33,300 | 40% | - | - | - |
| Annual Income Tax Due | - | €6,634 | €17,256 | |
| Tax Due as % of Gross Income | nil | 9.21% | 11.98% | |
| Source: Global Property Guide research |
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Notes
1 The property is jointly owned by husband and wife, but then taxed separately.
2 Exchange rate used: 1 EUR = 0.738667 GBP
3 Personal allowance for each taxpaper is GBP 5,035 (€ 3,719 ) for 2007.
4 Estimated costs. Actually incurred expenses such as letting fees, maintenance and repairs, lawyer´s fees, professional fees, and building insurance are all deductible.
5 Depreciation is computed as 10% of gross rental income.
6 Income tax rates for 2007 are as follows:
INCOME TAX 2007 |
|
| PROPERTY VALUE, £ (€) | RATE |
| Up to 2,150 (€ 1,588 ) | 10% |
| 2,150 - 33,300 (€ 24,598 ) | 22% on band over (€ 1,588 ) |
| Over 33,300 (€ 24,598 ) | 40% on all income over (€ 24,598 ) |
| Source: Global Property Guide | |
| NON-RESIDENT COUPLE (FROM A NON EU/ COMMONWEALTH TERRITORY) | ||||
| Non-resident couple´s rental income1 | €1,500 | €6,000 | €12,000 | |
| Annual Rental Income2 | 18,000 | 72,000 | 144,000 | |
| Less Personal Allowance3 | (4,054) | (16,270) | (32,830) | |
| Less Costs4 | (1,800) | (7,200) | (14,400) | |
| = Taxable Income | 12,146 | 48,530 | 96,770 | |
| Income Tax 6 | ||||
| Up to GBP2,150 | 10% | 636 | 636 | 636 |
| GBP2,150 - GBP33,300 | 22% | 1,272 | 9,278 | 19,890 |
| Over GBP33,300 | 40% | - | - | - |
| Annual Income Tax Due | €1,908 | €9,914 | €20,526 | |
| Tax Due as % of Gross Income | 10.60% | 13.77% | 14.25% | |
| Source: Global Property Guide research |
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Notes
1 The property is jointly owned by husband and wife, but then taxed separately (50% upon each partner). Exchange rate used: € 1 = GBP 0.675676.
2 Estimated costs. Actually incurred expenses such as letting fees, maintenance and repairs, lawyers´ fees, professional fees, and building insurance are all deductible.
3 Personal allowance for each taxpaper is GBP 5,035 (€ 3,719 ) for 2007.
4 Estimated costs. Actually incurred expenses such as letting fees, maintenance and repairs, lawyer´s fees, professional fees, and building insurance are all deductible.
5Depreciation is computed as 10% of gross rental income.
6 Income tax rates for 2007 are as follows:
INCOME TAX 2007 |
|
| PROPERTY VALUE, £ (€) | RATE |
| Up to 2,150 (€ 1,588 ) | 10% |
| 2,150 - 33,300 (€ 24,598 ) | 22% on band over (€ 1,588 ) |
| Over 33,300 (€ 24,598 ) | 40% on all income over (€ 24,598 ) |
| Source: Global Property Guide | |