Tax advisors with experience of property abroad - Munich

I'm looking for a Steuerberater in Central Munich (doesn't have to speak English).
He or She DOES need to know the stuff with German tax relating to properties owned abroad.

Looking for one or two appointments not a long term thing.

Cheers.

ahhhhhhhhhhhhhhhh - that old chestnut.

Is it a particular tricky one JE?
I get the feeling that its viewed as a complicated issue...

I cannot resist the temptation to dive in.

Disclaimer for the TT righteous:
Obviously you MUST get proper advice from a professional advisor, the value of your investment may not go up, JE may talk bollox...

As we all know Germany taxes you on your worldwide income. Property is a little different because the country in which the property is located will wish to tax any income first. So if you own a property in somewhere like Spain/France/UK etc then that country will get first dibs at the rental income.

e.g.:

Part 1. UK property rents at £10,000 per annum. You do a UK tax return each year declaring this income, and they nick for example £2,000 in tax (you get the usual UK tax free allowances etc, can offset the mortgage). Basically you do the tax return as if you lived in the UK and this was your only income.

Part 2. You declare this to the Germans. The full income and the tax paid in the UK. Under tax treaties you never pay tax twice but the Germans use the income to calculate your tax code here AND if they would have charged you more on that £10,000 (e.g. £3,000 if the property was in Germany) then you pay the extra balance of £1,000 to Germany. They get a 2nd bite at the cherry.

Or do you wanna sell it?

I have a written excemption from paying UK income tax on my UK property, it's purely about German tax.

Bollox. You don't.

I assume you have filled in an NRL1 to have your rental income paid Gross rather than with automatic deductions. This is the form here:

http://www.hmrc.gov.uk/cnr/nrl1.pdf

You will note the important part:

Approval of the application does not make the rent exempt from UK tax.

Edit. It is still potentially taxable but as I don't live in the UK...

Anyway, that's why I was a Steuerberater becasue if I have to pay tax on a negative income I'll sell it.

It is the NRL1 form. Means they pay you gross. It DOES NOT mean you are exempt from tax in the UK as shown above.

It doesn't matter that you don't live in the UK. These are the guidance notes:

http://www.hmrc.gov.uk/cnr/nrl1_notes_bw.pdf

Purpose of form NRL1
United Kingdom (UK) rental income is liable to UK tax
whether the landlord lives in the UK or not, and
normally a letting agent or tenant has to deduct tax
when paying rent to any landlord whose usual place of
abode is outside the UK. Form NRL1 enables an
individual whose usual place of abode is outside the UK
to apply to have his or her UK rental income paid
without deduction of UK tax. But our approval of the
application does not mean that the rent is exempt
from UK tax, and we may later ask the individual to let
us know whether they have any tax to pay by
completing a UK Self Assessment Tax Return.

If the income is NEGATIVE - for example the mortgage is greater than the rental income - then no tax to pay.

My understanding is that even if the UK tries to tax the income, I can't be taxed twice, which is why I need a Steuerberater
to explain how to write it off in the German system.

The question is whether a NEGATIVE income on a house in the UK can be used to reduce my tax burden in Germany,
the same as if the house was in Germany.

Please read post #4 again.


You declare the income here. You declare the tax paid already in the UK. The Germans then decide whether to charge you a bit more (based on their calculation) but as I said YOU NEVER PAY TAX TWICE. They take the UK payment into account.

Gets more interesting now.

So you have a "loss" in the UK not a profit. No UK tax or German tax to pay but...

Can this mortgage payment loss be offset again German tax?

Hmmmmm. Got me there!

Ahhh, you added to post #4.

OK, bearing all that in mind.

If the house was running as NEGATIVE in the UK, there would be no tax to pay but as that would be my only UK tax issue, they would be no refund as I hadn't paidd them any money.

The when the Germans came for their "second bite of the cherry", they question is whether than NEGATIVE income (plus maintance, mortgage etc etc) would change my German tax code liabilities. ie as my real income is LESS than I have been been paying income tax on if they would pay me money back.

Basiclly if anyone tried to tax me I'd quite possibly sell.

Correct.


No 2nd bite as no income. Whether you can offset these UK losses against your German tax form is a thorny question. Might also depend if you can argue that this loss is caused by your relocation to Germany etc etc. But I doubt your tax situation in Germany could get worse - only better.


It doesn't sound like it you owe anyone. When it comes to selling this all gets hairy depending on how long you have owned the property, and when you moved out. Long discussions on other threads, and if you see 3 German accountants you are liable to get 4 opinions on this subject.

How long have you owned it? When did you last live there? Is it in the UK?

It's in the UK, I've never lived in it and I've owned it a bit over 2 years.
I don't really want to sell it.

It's that thorny question, can I set UK losses off againt German tax liabilities that I need a Steuerberater for.