By Gareth Horsfall
This article is published on: 9th March 2024
Hello again and welcome to my latest article (which was supposed to be released in February but has now ridden over into March 2024).
My delay was caused by some new found success recently as a star of YouTube (the use of the term ‘star of You Tube’ might be stretching it a bit, but I will leave it for now).
You may have seen the interview I did (you can see it again HERE) for Real Expats in Italy channel .
It has taken my name a little bit farther and wider that it had been previously and created a surge in new enquiries and queries, which I am very grateful for. It’s always nice to be introduced to new people and learn more about how people are living in Italy. The more I understand the more I can hopefully pass back to you through this E-zine. Anyway, hence why the E-zine is a bit later than usual.
There were a few things I wanted to report in this E-zine, non more so than the € 2000 flat fee charge for access to the Italian healthcare system for non-EU citizens resident in Italy (this doesn’t include students or those who are working and paying ‘contributi’ or those of you who have the S1 approval for reciprocal healthcare). You may remember from a previous E-zine ‘BIG ITALIAN TAX NEWS‘ from October 2023, that I had reported on the fact that this law was going to come into place on January 1st 2024. Well it did!
The interesting thing is that the financial impact is very different for varying groups of people. For example, I was speaking with a lady from New York recently and when I explained that she would have to pay the annual charge of €2000 to access healthcare (excluding doctors visits and prescriptions), her response was “well, I am paying $2000 already……each month!, so that would be a huge win for me”! Clearly when put into context of what people have to pay in the US for healthcare it seems a bargain.
The category which seem to have been caught out are the UK citizens resident in Italy pre-Brexit and who were accessing the healthcare system based on income criteria. (See the income calculation on the Ministero della Salute website link below). This still applies for EU citizens moving to Italy and wanting to buy into the healthcare system.
https://www.salute.gov.it/imgs/C_17_pagineAree_2522_listaFile_itemName_0_file.pdf
I was contacted by 2 people in late January to tell me that their local health offices were now asking for the full € 2000 pa. payment to renew their Tessera Sanitaria. They were not recognising the fact that they were UK citizens covered by the UK / EU withdrawal agreement. To be fair to the Italian authorities nothing was mentioned in the text stating that there would be an exclusion clause for UK citizens resident pre-Brexit, so it’s no surprise they were asked for the full amount. I asked some people I know who are still involved in the campaign to protect UK citizens rights post-Brexit and they could only tell me that the issue had been lodged with the UK Embassy, but that they had not heard anything back. I am not sure if that situation has changed but it may just be one of those cases where we just have to learn to live with it.
Alderney; Andorra; Anguilla; Antigua e Barbuda; Dutch Antilles; Aruba; Bahama; Bahrein; Barbados; Belize; Bermuda; Brunei; Costa Rica; Dominican Republic; United Arab Emirates, Ecuador; Philippines; Gibraltar; Gibuti; Grenada; Guernsey; Hong Kong; Isle of Man; Cayman Islands; Cook Islands; Marshall Islands ; Isole Vergini Britanniche; Jersey; Libano; Liberia; Liechtenstein; Macao; Malaysia; Maldive; Maurizio; Monserrat; Nauru; Niue; Oman; Panama; Polinesia Francese; Monaco; Sark; Seychelles; Singapore; Saint Kitts e Nevis; Saint Lucia; Saint Vincent e Grenadine; Taiwan; Tonga; Turks e Caicos; Tuvalu; Uruguay; Vanuatu; Samoa.
I mention this because a few people have contacted me recently who have had, or are having, an ‘expat’ professional career often working in places like Hong Kong or the United Arab Emirates and have accumulated assets in those jurisdictions; mainly investment portfolios and savings. In addition, it is not unusual for someone working overseas to invest/save in an offshore territory like Jersey or the Isle of Man as a way of retaining assets in a more familiar jurisdiction whilst living abroad. However, a subsequent move to Italy would mean that you would end up paying double the amount of wealth tax, and not only. In addition, Italy penalises some assets which are not held within the European regulatory framework so you could end up getting a double whammy tax bill when it could quite easily be avoided by re-structuring assets in a more tax efficient manner for Italian life.
As a US person moving to Italy to live, you can’t escape your own level of tax complication. The main one being that the US penalises you for owning some non US-domiciled assets but Italy does almost the same for investing in non-EU harmonised assets. Caught between a rock and a hard place! Again, a restructuring event might be the best way forward.
For anyone (UK citizen or any other national) who has contributed to a UK SIPP (Self Invested Personal pension) we now have a little more clarity on the tax treatment of the pension account. On 11th January, the Agenzia delle Entrate published an Interpello (opinion on a tax question submitted to them) specifically on the subject of this type of account. You can read the document HERE (interestingly, US retirement accounts (IRA’s) are pretty much the same legal structure as a UK SIPP and so it would make sense that the same logic is applied to them in Italy, as well).
The document pretty much confirms what I have known and been advising clients and commercialisti for some time. The first thing being that the Italian ‘previdenza complementare’ tax regime cannot be applied to these accounts, but equally neither should the wealth tax be applied to this kind of retirement accounts.
If you have any kind of UK personal pension account then I would suggest you take a look at the section RW on your Italian tax return and see if the wealth tax has been applied. The tax will be shown in the box No 15, and it should not be there! If you find this is the case you need to speak with your commercialista. Instead the box No 20 should appear with an ‘X’, in it which applies the ‘monitoraggio’ status, but not taxed. Also, do not assume that because wealth tax is not applied that it does not have to be reported…it does. It’s just that it is monitored as an asset rather than taxed on the fund each year. You will normally be subjected to tax when you make a withdrawal from the account. If you are unsure what to look at, then you can always contact me and I can take a look for you.
Tax declaration time is rapidly approaching, commercialisti are starting to be run off their feet and mistakes can be made so if you are invested in a UK personal pension plan (individual or corporate), a SIPP, or a QROP’s, then check your tax return for accuracy and ensure that you are not paying tax that you shouldn’t be paying!
On a final note for this E-zine, I wanted to let you know that I will hosting another Rome Business Lunch on April 12th 2024 at Ristorante Amedeo (nr Termini).
On previous lunches we have had people from all walks of life, not just business people. Also some retirees or people running many different activities. Most found it incredibly interesting and useful to connect with people who they may not have otherwise come into contact with in the Englsih speaking community. It’s a great way to speak with people who are providing services in a non-pushy, informal manner.
I give everyone a chance to speak and introduce themselves.. If you run a business you can explain to the group what you do, and if you are along to listen to others and gather information you can just explain why you are in Italy and tell us a story about your life. I have found it to be a great way to connect with others, for many reasons, and not just business people exclusively. The €25 a head menu is shown below for your information. So, I hope you can join us. All you need do is to contact silvia.loi@spectrum-ifa.com and let her know that you would like to be added to the list. (You need to book no later than Tuesday 9th April)
In my next article I will be looking at the subject of the expenses that you can detract from your taxes in Italy, such as medical expenses. So stay tuned for the next edition!
If you have any questions about any of these issues and how they apply to you and your financial situation, or if you think that you might be paying more than need to, then do get in touch and I will be happy to see if I can help you with your plans.
I can be contacted on email: gareth.horsfall@spectrum-ifa.com or on cell: +39 333 6492356
