DT10156 - Italy: Notes

Capital Gains (Article 13)

Whereas capital gains are generally taxable only in the state of residence of the person making the disposal, the provisions of paragraph 5 allow Italy to tax gains from the alienation of any property where a UK resident has been a resident of Italy at any time during the five years immediately preceding the alienation of the property, and they are not subject to tax on those gains in the UK.

Government service (Article 19)

Although Article 19 of the new convention is worded in a standard manner (see INTM163170 onwards), it has been agreed to extend the scope of the Article to cover remuneration and pensions paid to the employees of the following:

• with respect to the UK:
  • the Commonwealth War Graves Commission
  • the British Council
  • the British School of Rome
  • the British Institute of Florence
• with respect to Italy:
  • the Italian Railway Administration (FS)
  • the Administration of Postal and Telecommunication Services (PPTT)
  • the Italian National Tourist Office (ENIT)
  • the National Institute for Foreign Trade (ICE)
  • the Bank of Italy (Banca d’Italia)
  • the Italian Institute of Culture in London and Edinburgh

Any claim to extend further the scope of the Article should be referred to Business, Assets and International, Tax Treaty Team.

Teachers (Article 20)

The convention contains a Teacher’s Article which gives an exemption from UK tax for visiting teachers and researchers on their income as teachers or researchers provided their visit to the UK lasts less than two years.

Offshore Activities (Article 23)

The convention contains special provisions relating to activities in connection with the exploration or exploitation of the sea bed and sub-soil and their natural resources.