Residency

Dreamgirl Image
03/01/2014 - 03:54

I have heard a lot of conflicting information about residency. I have UK citizenship and am wondering about becoming an Italian resident. I am fortunate in that I can spend >183 days in either country and so it is not just an automatic issue of where I spend most of my time.I bought my house in Italy 10 years ago and so this is not a question of trying to avoid tax on a recent purchase by pretending to be a resident. We paid the full tax due BTW. This is truly me trying to understand the pros and cons of the situation so I can make an informed decision and live accordingly. My main questions are what the Italian state claims as tax on assets abroad (eg a house we own with a big mortgage in the UK) and how the UK views overseas residents vis a vis returning for NHS treatment. The NHS question is a worst case scenario question (eg future serious diagnosis) rather than being based on any current conditions.I have enquired, googled and heard various conflicting things and so I am still confused on these two issues. The local Comune is no help either as they have no expertise in this. Any advice would be welcomed. Thanks.

Comment

Hi Dream Girl,There is a lot of stuff on here, it is just very hard to find. If you look at this old thread & follow some of the links in it you will find everything you need to know. The communes vary enormously in the veracity of advice they give. It is better to do your own research:http://www.italymagazine.com/community/post/health-careFor what it is worth I would advise keeping in both the Italian & UK health systems. I know folk say you can't but..........they don't talk to each other!Your tax residency situation is probably the most important consideration. This is different to your actual residency.In bocco al Lupo smiley

Thanks a lot chrisnotton. I have heard that there is a distinction between tax residency and residency but I have not ever been able to find out exactly what this difference is. Can somebody tell me or tell me where to look?As I said I have heard so much conflicting information and when I have googled I have found information which is dated a few years back and I think there have been changes in laws recently? I probably will eventually seek advice from an accountant (recommendations?) but I would like to be informed in advance so I can ask pertinent questions.

The short answer at the moment is don't take residency if you can avoid it. There is a difference on paper between anagraphical residnecy and tax residency, however the procedure in Italy does not allow for a choice.  You are either resident or not.  Obviously if you are in Italy for more than 183 days a year, you have no choice - you are deemd to be fiscally and anagraphically resident in Italy.  For someone in your position, the only advantage in being resident would be a smaller council tax charge, and a saving on your electricity and bank charges.  That is is.  If you opted for Italian residency now, after owning a house for ten years, you would still need to prove to Italy that you have enough money to live on and not be a burden on the state - so full health insurance would be required, as well as the S1.  You would be eligible for IVIE and IVIFE taxes on any patrimony held outside Italy - ie your house, bank accounts, business investments and business - on which you would pay varying amounts of tax per year  to Italy. You would need an accountant in Italy to file your tax return, and claim things back under the double tax treaty.  In short, it would be costly and time consuming.   If you are not required to become an Italian resident - then I would advise you to avoid it, if at all possible. 

In reply to by modicasa

Having read the above thread, I am still confused. We have a house in Italy and decided to move out there full-time in 2011. We understood that as we were living there we needed to become residents, so we duly applied for, and received our residency status and code fiscale.We also own properties in the UK which we rent out to fund us living in Italy. My partner has definitely spent less than 183 days in Italy for each of the last 2 years, but I have been there almost full time. We pay UK taxes, and our assets are in the UK so why do we need to declare all of this to Italy? And if we do have to how difficult is it for us to revoke our residency, and just pay higher electricity costs ?

If you are resident in Italy then you are fiscally resdient in Italy and subject to Italian tax law.  You are not resident in the UK.  This means that your worldwide income has to be declared in Italy and subject to teh tax agreements you can deduct what tax you have paid in the UK:  However, you must fill in a tax return in Italy, and in addition pay Italian surcharges because you have patrimony abroad.    You can revoke your residency just by going to the anagrafe and telling them you are emigrating back to the UK - you will have to notify who needs to be notifed - comune, bank, ENEL etc - and nominate a UK address for your residency there.