Hi All,
Quick question re rental income and tax in Malta.
If I rent out a property in the UK and that income is paid into my UK bank account. (less than £10k annually).
And if then I sometimes want to pay for my own accommodation rent here in Malta from that UK bank account (so use Transferwise for example to pay from the UK account directly into my landlords account). The UK account also has previous money in it from savings.
Should I declare that money (paid to landlord from the UK account) as money remittanced to Malta for tax purposes at the end of the year?
(how is it decided if that money is rental income from the property, or capital from the money that was already in the UK bank account that I saved while living in the UK?).
I also work on Malta for a Maltese company and earn a salary here and so am taxed on that locally also and that salary is paid into a Malta bank account.
I am a little confused as to how things should be stated/allocated?
Thanks,
Trav
Rental income outside of Malta
Hi,
Rental income is normally taxed in the country where it arises, so in the UK.
The problem is when you remit money to Malta. Until 2019 you could remit money to Malta in exemption of local tax if the money was of capital nature (i.e. you had savings in your account).
In 2020 the Commissioner for Revenue issued some new guidelines, and in particular:
"Remittances to Malta for ordinary expenses, such as living expenses, are presumed to be remittances of income unless proven otherwise, regardless of the foreign account out of which the remittance is made. When remittances are made for a capital purpose, such as the purchase of property in Malta, and the individual can show that they originate from moneys held abroad as capital, such as an inheritance or the proceeds from the sale of capital assets, they will be regarded as remittances of capital."
You can google this text and you will find the entire document.
I am afraid to say that rent is a living expense, and, if you remit money to Malta to pay rent or even use a credit card for your groceries, you have to declare the remittance and pay the tax.
Kind Regards
Andrea
Thank you for the reply.
So, as this income remitted to Malta is income from property rental (even though the property is in the UK), I assume I declare at as income from property and as such it would be taxed at the Malta property rental tax rate which is 15%?
Thank you,
Trav
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Information Date : 3rd October 2012
I am NOT a Financial Advisor, I am just another expat. If in doubt seek professional advice.
