Italian taxes for Brits: leaving the UK system, the treaty and your State Pension

Once you're tax resident in Rome, Italy taxes your income from everywhere, UK pension and ISA included. The job is to leave the UK system cleanly and let the UK–Italy treaty decide who taxes what.

The short version

• Italy taxes its residents on worldwide income through IRPEF, at 23%, 33% and 43% from 2026, plus regional and municipal surcharges [5].
• Since 2024, more than half the year physically in Italy is enough on its own to make you tax resident, even if you work remotely for a UK firm [6].
• The UK taxes by residence, not citizenship: tell HMRC you've gone with form P85, or the SA109 pages if you file Self Assessment [1].
• The UK–Italy Double Taxation Convention of 1988 decides who taxes what. Private and workplace pensions are taxed only where you live; UK government service pensions usually stay with the UK [2][3].
• Your UK State Pension still goes up every April in Italy [4]. UK bank accounts, ISAs and property must also go on the Italian return (the quadro RW) [7][8].

When Italy treats you as resident

Italy looks at the calendar year, not the UK's April-to-April tax year. You're Italian tax resident if, for most of the year (183 days, or 184 in a leap year, and the days don't have to be in a row), you meet any one of these tests [6]:

1. Residence in the civil-law sense: Italy is where you habitually live.
2. Domicile, redefined from 2024 as the place where your personal and family relationships mainly are. The Agenzia delle Entrate says this now puts family and personal ties ahead of purely economic ones [6].
3. Registration at the anagrafe, the town hall's register of residents. Since 2024 this is only a presumption that you can rebut, but if you've registered in Rome, expect Italy to assume you're resident [6].
4. Physical presence, the new test from 2024. It's purely objective and counts even part days. The tax office's own example: someone working in Italy in smart working for most of the year is tax resident [6].

That last one matters to the many Brits in Rome working remotely for a UK employer. Spend more than half the year in your flat in Monteverde and you're in the Italian system, whatever your contract says. Our guide to working abroad for a UK employer covers the payroll and National Insurance side.

If both countries claim you, the treaty's tie-breaker in Article 4 looks at your permanent home, then your centre of vital interests, then your habitual abode, then nationality [3].

IRPEF: how much Italy takes

IRPEF (imposta sul reddito delle persone fisiche) is charged on the individual, not the couple, so there's no French-style family splitting. The 2026 Budget Law cut the middle rate from 35% to 33% from 1 January 2026 [5].

Source: the Agenzia delle Entrate's IRPEF rates page, reflecting the 2026 Budget Law [5]. Pound conversions use the Bank of England spot rate of 5 November 2026 (£1 = EUR 1.2002).

On top of the national rates come the addizionale regionale (set by Lazio) and the addizionale comunale (set by Roma Capitale), each with its own rates and rules [5]. Together they add a few percentage points, and Lazio's isn't among the cheapest; check the current rates on your first return. Employees and pensioners have a no-tax area worth roughly the first EUR 8,500 (about £7,080) of income, thanks to tax credits (detrazioni) that shrink as income rises [5].

Returns, deadlines and the commercialista

Employers and Italian pension payers withhold tax monthly, but anyone with foreign income usually files a return: the simpler Modello 730 or the fuller Redditi Persone Fisiche (Redditi PF). Both cover the previous calendar year, and the tax office prepares a pre-filled version each spring. Most Brits in Rome pay a commercialista (an accountant) or a CAF (a tax help centre) to file, and it's money well spent in your first year.

Declaring UK accounts, ISAs and property: the quadro RW

This is the bit that trips people up. As an Italian resident you must report foreign assets each year in the quadro RW of the Redditi return (the quadro W in the 730). The FCDO warns that penalties for not filing, or for incomplete or wrong figures, are severe [7].

Two wealth taxes ride along with it:

• IVAFE on foreign financial assets: 0.2% a year of the market value of UK shares, funds and ISAs, and a flat EUR 34.20 (about £28.50) per UK current or savings account. The flat charge isn't due if the average balance with that bank across the year is EUR 5,000 (about £4,170) or less [8].
• IVIE on property abroad, such as the house you've kept in Reading. The rate is 1.06% of its value a year [10], and working out that value for a UK house is a job for your commercialista.

An ISA is tax-free only in the UK. In Italy the interest, dividends and gains inside it are taxable income, and the wrapper counts towards IVAFE. Our guide to ISAs when you move abroad explains your options.

Leaving the UK tax system properly

The UK doesn't stop taxing you because you've bought a monthly ATAC pass.

1. Check the Statutory Residence Test for the year you go. See the Statutory Residence Test explained.
2. Tell HMRC. Use form P85 if you don't normally file a return, with parts 2 and 3 of your P45. If you file Self Assessment, use the SA109 residence pages instead, which go by post [1].
3. Claim split-year treatment if you qualify, so the Italian part of the year stays out of UK tax. See split-year treatment.
4. Keep proof of the move: your Rome lease, anagrafe registration, flights and Italian payslips.

After that, the UK taxes only your UK income, rent from a UK property being the usual example [1].

The UK–Italy treaty: who taxes what

The 1988 convention was signed at Pallanza on 21 October 1988 and has applied since 6 April 1991 for UK income tax and 1 January 1991 for Italy [2][3].

Two points worth knowing:

• Government pensions. If you draw a teacher's, NHS or civil service pension, the UK keeps the right to tax it under Article 19. Italy can still take it into account, and if you later take Italian citizenship the position changes, so get it checked.
• UK rent. You still deal with HMRC on the UK side, including the Non-Resident Landlord Scheme, and Italy then gives credit for the UK tax [3]. Our guide to UK income while you live abroad has the details.

Your UK State Pension in Italy

The good news: Italy is in the EEA, so your UK State Pension goes up every April exactly as it would back home in Blighty [4]. The full new State Pension is £241.30 a week in 2026/27 [9]. See the UK State Pension abroad for how to claim from abroad.

On tax, the State Pension of an Italian resident is in practice taxed in Italy. It's paid gross, so it goes on your Italian return and is taxed at IRPEF rates with the surcharges on top. If you worked in Italy too, INPS deals with any Italian pension [7].

If you're retiring to a small town in the south rather than to Rome, Italy's 7% regime for foreign pensioners may beat IRPEF by a mile; see Italy's flat tax and the 7% regime.

Never transfer a pension because of a move. A UK pension can be paid to you in Italy as it is. Transfers to overseas schemes need regulated financial advice, can trigger the overseas transfer charge, and attract scammers; read the FCA and MoneyHelper warnings first. See UK workplace and private pensions abroad.

This is general information: a tax adviser who knows both countries can check your situation, especially in your first year. And for a reality check from people who've survived their first quadro RW, try our community group for Brits in Italy.

Sources

1. GOV.UK: Tax if you leave the UK to live abroad
2. GOV.UK (HMRC): Italy tax treaties
3. GOV.UK (HMRC): 1988 UK–Italy Double Taxation Convention, in force
4. GOV.UK (DWP): Countries where we pay an annual increase in the State Pension
5. Agenzia delle Entrate: Aliquote e calcolo dell'Irpef (last updated 13 January 2026)
6. FiscoOggi (Agenzia delle Entrate): Nuova disciplina della residenza fiscale, circolare 20/E (4 November 2024)
7. GOV.UK (FCDO): Living in Italy (last updated 28 October 2026)
8. Agenzia delle Entrate: IVAFE, base imponibile e aliquote
9. GOV.UK: The new State Pension, what you'll get
10. Agenzia delle Entrate: Ivie, base imponibile e aliquota (checked 11 November 2026)

Keep reading

• Italy's flat tax and the 7% regime for pensioners
• Codice fiscale, residenza and the permesso di soggiorno
• Double taxation agreements and reliefs
• Leaving the UK: telling HMRC (P85) and your last tax year