When HMRC asks about the property you kept in Dublin
The Scenario
You moved to London from Ireland several years ago. You still own a property back home that you rent out to tenants.
In Ireland, you file the relevant tax return each year and pay Irish tax on the rental profits. Your UK income is handled through PAYE, so you have never filed a Self Assessment return here.
Then a letter arrives from HMRC. It says they hold information suggesting you have overseas income that has not been declared on a UK tax return. You are not sure what it means. You assumed everything was covered. You are not sure what happens next.
At a Glance
- Client profile: Irish citizen, UK tax resident, working in London on PAYE
- Situation: HMRC contact regarding undeclared Irish rental income
- Core issue: Rental profits from an Irish property not reported on a UK tax return
- Cause: Assumption that paying Irish tax and being on UK PAYE meant all obligations were met
- Resolution: Voluntary disclosure via HMRC Worldwide Disclosure Facility, double taxation relief applied, modest net liability
- Time to resolve: Approximately five weeks from first meeting to accepted disclosure
Why this is more common than you might think
The Common Travel Area between the UK and Ireland makes movement between the two countries remarkably easy. Irish citizens can live and work in the UK without a visa or employment permit, and many do. London has long attracted Irish professionals across every sector, from financial services and technology to healthcare and construction. What often gets left behind, quietly and without much thought, is a property.
It might be a family home bought before the move, now rented to tenants while the owner builds a life in England. It might be an investment picked up when the Irish property market was recovering, held for the long term. Whatever the reason, the rental income it generates tends to feel like an Irish matter, handled by an Irish letting agent, taxed through the Irish system, and filed on an Irish return. The assumption that this is sufficient is understandable. It is also, in many cases, wrong.
If you are tax resident in the UK, which most people working full-time in London will be, HMRC expects you to declare your worldwide income. That includes rental profits from Ireland, even if you have already paid Irish tax on them. The existence of the UK–Ireland Double Taxation Convention means you should not end up paying tax twice on the same income, but the obligation to report it remains. This is where the gap between what people believe and what HMRC requires tends to open up, often silently, often for years.
Around Richmond, Putney, and across south-west London, we see this pattern regularly. Many of our clients are Irish nationals who have settled in the area, built careers, started families, and maintained property interests back home. As accountants for residential landlords with overseas holdings, we understand that these clients are not evading tax. They are navigating two tax systems that each make sense in isolation but require careful coordination when you are resident in one and earning income in the other.
The UK–Ireland Double Taxation Convention is specifically designed to prevent you from being taxed twice on the same income. But it does not exempt you from the requirement to declare that income to HMRC. The obligation to report and the obligation to pay are separate questions, and it is the reporting gap that most often creates difficulty.
Why this surfaces when it does
For years, it was entirely possible to hold a rental property in Ireland, pay Irish tax on it, and never hear a word from HMRC. The systems did not talk to each other in any meaningful way, and unless you volunteered the information, the UK tax authority simply did not know. That world no longer exists.
The Common Reporting Standard, which the UK and Ireland both adopted, means that financial and tax information is now exchanged automatically between the two countries. Irish Revenue shares data with HMRC, and HMRC shares data with Irish Revenue. Property income, bank interest, investment returns, all of it flows across borders through institutional reporting channels that operate without any action from the taxpayer. When HMRC writes to say they hold information suggesting undeclared overseas income, it is not a fishing exercise. They have specific data, usually from a financial institution or a tax authority, that tells them something has not been reported.
Since April 2025, the position has tightened further. The abolition of the remittance basis means that all UK tax residents are now taxed on their worldwide income and gains, regardless of domicile status. For Irish citizens who may previously have understood their position through the lens of domicile, believing that income not brought into the UK was not taxable here, this change is significant. The rules are now clearer but also broader, and anyone who was operating under older assumptions may find that their compliance position needs revisiting.
HMRC has also been given significantly more resource and political backing to close the tax gap. The volume of nudge letters has increased, enquiries are being opened more frequently, and the penalties for failure to disclose offshore income have become considerably steeper. A voluntary, unprompted disclosure still attracts the lowest penalties, but the window between becoming aware of an issue and HMRC raising it formally has narrowed. The practical message is straightforward: if you think there might be something to declare, the cost of checking now is almost always lower than the cost of waiting.
“She had been paying Irish tax on the rental income for six years without a single issue. Her Irish accountant had never mentioned any UK obligation, because from an Irish perspective there was nothing wrong with her position. The problem was not what she had done in Ireland. It was what she had not done in the UK.”
How the scenario unfolded
The situation described above is drawn from composite experience across several clients rather than any single individual. But the details are typical of how these cases develop, and the emotional arc is one we recognise immediately.
The client in question, a woman in her late thirties, had moved to London from Dublin roughly seven years earlier. She had a good career in financial services and was on PAYE with a well-known employer. Before leaving Ireland, she had purchased a two-bedroom house in a residential area of Dublin. It had been a sensible buy at the time, and rather than sell it, she decided to let it out. A local letting agent managed the property, collected rent, arranged maintenance, and at the end of each tax year, her Irish accountant prepared the relevant return. Irish tax was paid. Everything felt orderly.
What she had not appreciated was that her UK tax residence created a parallel obligation. HMRC expected her to register for Self Assessment and include the Irish rental profits on her UK return. The fact that she was on PAYE and had never needed to file a UK return before made the gap invisible. There was no trigger, no reminder, no prompt from her employer or her bank. The first indication that anything was wrong was the letter from HMRC, which arrived on a Tuesday morning and immediately disrupted her week.
When she came to see our personal tax team, she was composed but clearly anxious. She had spent two evenings reading online forums and had convinced herself that the penalties would be enormous and that HMRC might treat her as a deliberate evader. The language on the forums was alarming and often inaccurate. What she needed, before anything else, was a calm and specific assessment of her actual position.
“The first thing we did was ask her to stop reading the forums. Not because they are always wrong, but because they deal in worst-case scenarios and generic advice. Her position was specific, and specificity is what produces a good outcome. Within half an hour, we had a reasonable picture of what the exposure looked like, and it was far less alarming than what she had been imagining.”
Her Irish rental profits, after allowable expenses, were modest. Roughly eight to ten thousand pounds a year, varying slightly depending on maintenance costs and void periods. She had been paying Irish income tax on these profits at the standard rate, which meant she had already discharged a substantial part of any UK liability through the double taxation credit mechanism. The net additional UK tax, once the Irish tax credit was applied, was relatively small for each year. The cumulative total across the undeclared years was meaningful but manageable, not the five-figure catastrophe she had been bracing for.
What the process involved
We began by registering as her tax agent with HMRC, which meant she did not need to deal with HMRC directly. For someone already anxious about the situation, that buffer matters more than people realise. The administrative burden of corresponding with a government department while simultaneously trying to work out what you owe is something most people find genuinely stressful.
The next step was to gather the information needed for the disclosure. This meant obtaining records of the rental income and expenses for each year that had not been reported, details of the Irish tax paid, and evidence of her UK tax residence and PAYE history. Her Irish accountant was helpful in providing the Irish side, and her UK payslips and P60s covered the rest. We also needed to check whether she had any other overseas income, bank interest in Ireland, for instance, that should be included. In her case, there was a small amount of deposit interest that had also gone unreported, which we included in the disclosure.
We prepared the disclosure through HMRC’s Worldwide Disclosure Facility. The WDF is the standard route for disclosing UK tax liabilities that relate to offshore income, and it remains open and actively maintained by HMRC. The process involves notifying HMRC of your intention to disclose, receiving a unique reference number, and then submitting the full calculation within ninety days. The calculation covers the additional UK tax owed for each year, statutory interest on late payment, and a penalty.
The penalty is the part that causes the most anxiety, and it is worth explaining how it works. Penalties for offshore income are calculated as a percentage of the potential lost revenue, which is the tax that should have been paid but was not. The percentage depends on the behaviour that led to the failure and on whether the disclosure is voluntary or prompted by HMRC. Our tax investigation assistance team helped ensure that, because our client came forward voluntarily, before HMRC had opened a formal enquiry, and because the failure was clearly careless rather than deliberate, the penalty fell at the lower end of the applicable range. We prepared a detailed explanation of the circumstances, which helped HMRC understand that this was an administrative oversight rather than any attempt at concealment.
A voluntary disclosure made before HMRC opens a formal investigation will almost always attract a significantly lower penalty than one made after HMRC has already started asking questions. The difference can be substantial, in some cases, penalties for prompted disclosures can reach up to two hundred per cent of the tax due, compared with much lower rates for unprompted cooperation.
The entire process, from our first meeting to HMRC accepting the disclosure and confirming the matter closed, took approximately five weeks. The net amount she paid, after applying the Irish tax credit, was considerably less than she had feared. More importantly, she was now registered for Self Assessment, and her future Irish rental income would be properly reported alongside her UK employment income each year.
The emotional weight, and why it matters
Tax professionals sometimes underestimate the emotional impact of an HMRC letter. For the individual receiving it, the experience goes well beyond administrative inconvenience. It touches on competence, on reputation, on the fear of being thought dishonest, and on a deep-seated anxiety about dealing with an authority that has significant powers and a reputation for being unforgiving.
Most of the people we help through this process are conscientious by nature. They pay their bills on time, they file returns when they know they need to, and they take their responsibilities seriously. The discovery that they have inadvertently failed to report something feels like a personal failing rather than what it usually is: an understandable gap in awareness about how two tax systems interact. That emotional response is natural, but it is almost always disproportionate to the reality.
In the vast majority of cases we see, the actual financial exposure is manageable. The Irish tax already paid reduces the UK liability significantly. The penalties for genuine oversight, disclosed voluntarily, are calibrated to reflect the behaviour rather than to punish. And the process of making a disclosure, while it requires care and accuracy, is well-established and follows a predictable path. What is not predictable, and what causes real damage, is the anxiety that builds in the weeks between receiving a letter and actually speaking to someone who can assess the position properly.
That shift, from dread to clarity, is often the most significant moment in the entire engagement. It is worth more than any technical calculation, because it allows the person to stop catastrophising and start dealing with the situation as it actually is.
What changes afterwards
Once the disclosure is accepted and the matter closed, the ongoing obligation is straightforward but does require attention. Each year, the Irish rental profits need to be included on the UK Self Assessment return, alongside any other income. The Irish tax paid is claimed as a credit, and the net UK liability is usually modest. The important thing is that the return is filed on time and the figures are accurate.
Some clients find, once they understand the full picture, that maintaining a property in Ireland is still worthwhile. The rental returns may be good, the property may have sentimental value, or it may be part of a longer-term plan to return. Others conclude that the administrative burden of dual-country compliance is not justified by the income, and they begin to consider selling. Neither decision is wrong. It is simply a question of whether the complexity feels sustainable once you understand what is involved.
What is not sustainable is continuing to hold a foreign property while hoping HMRC will not notice. They already have the data. The question is whether you are reporting accurately or whether you are waiting for another letter that arrives with rather less goodwill than the first.
If this feels familiar
If you are an Irish citizen living in the UK with rental property back home, or if you hold any form of overseas income that you are not certain has been properly declared, the most useful next step is usually a short conversation with someone who understands both the disclosure process and the specific interaction between the UK and Irish tax systems. Our personal tax planning advisors work with internationally mobile clients regularly and can help you assess your position quickly.
Not to sell you services you do not need, but to clarify whether your position requires action or whether you are already compliant and simply need reassurance. Most of the time, clarity alone is enough to reduce the stress significantly. You either discover that everything is in order, which is relieving, or you discover that something needs to be corrected, which is at least knowable and manageable.
Our personal tax team in Richmond works with Irish nationals and other internationally mobile clients regularly. If you would like to talk through your position, you are welcome to get in touch.
About the author
Area Managing Partner, Xeinadin Richmond
LinkedIn: https://www.linkedin.com/in/donovan-crutchfield-22550814/
Donovan works with owner-managed businesses and private individuals across Richmond-upon-Thames and the wider South West London catchment. His practice includes a significant number of internationally mobile clients navigating the intersection of UK residency, overseas assets, and HMRC disclosure obligations.
