The Israel Tax Authority issued an assessment against me for rental income I never reported. Can I still fight it from the UK?

The letter arrives in Hebrew, at the Tel Aviv address of a tenant who moved out in 2021, and reaches a landlord in Manchester six weeks later. By then a third of the objection window has gone. A best-judgment assessment is not a bill someone is inviting you to discuss. It is a formal determination that becomes final and enforceable if you do nothing, and the two deadlines that matter are both 30 days long.

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Detailed Answer

Section 145(b) of the Income Tax Ordinance [New Version] 5721-1961 applies precisely to the non-filer. Where a person has not delivered a return and the assessing officer (pkid shuma) believes tax is due, the officer may determine that person's chargeable income to the best of his own judgment, and the resulting figure carries the same force as an agreed assessment unless it is challenged. There is a real asymmetry buried here that catches non-residents. The four-year limitation in Section 145(a)(2) runs from the end of the tax year in which a return was filed under Section 131, so a landlord who filed nothing has no limitation clock protecting him at all. Objection is governed by Section 150(a): written, within 30 days of delivery of the assessment notice, stating the grounds. Extensions exist where absence, illness or other reasonable cause prevented timely filing, and living abroad is argued under that limb more often than the Ordinance's drafters probably imagined. The Ordinance also runs a clock against the Authority. Under Section 152(c), if no order is issued within one year of the objection, or within four years of the end of the tax year in which the return was filed, whichever is later, the objection is treated as accepted.

Running this from Britain has three practical problems, and none of them is the law. Service is the first: the assessment is validly delivered to the last address the Authority holds, which for most non-resident landlords is the property or a long-dead accountant, so the 30 days can be half spent before you know the file exists. The second is evidence. A best-judgment assessment is built on estimates, and it collapses against documents, meaning bank statements showing what actually reached you, the tenancy agreements, the mortgage interest and depreciation you were entitled to deduct, and proof of the amounts already withheld. Anyone who declared the same rent to HMRC has usually created the paper trail that defeats the Israeli estimate. The third is money. Filing an objection does not suspend collection of the undisputed portion, arrears carry linkage differences and interest, and the Israel Tax Authority can register a charge against the apartment, which surfaces later as a blocked sale. Everything can be done by an Israeli representative under a notarised and apostilled power of attorney, and your physical presence is not needed for the assessment discussions.

In Practice: Under Section 145(b) of the Income Tax Ordinance 5721-1961 the assessing officer may assess a non-filer to the best of his judgment. An objection under Section 150(a) must reach the Israel Tax Authority (Rashut HaMisim) within 30 days of delivery, and an appeal against a Section 152(b) order goes to the District Court in the assessing officer's district under Section 153(a) within a further 30 days, under the Court Regulations (Income Tax Appeals) 5739-1978. On an estimated NIS 300,000 of unreported rent the exposure before deductions is substantial, and Section 152(c) deems the objection accepted if no order issues within one year of filing it.

When to Consult a Lawyer

• The assessment covers years in which you were also declaring the rent to HMRC. The double-tax treaty and the foreign tax credit position have to be argued in the objection itself, not saved for the appeal.
• A charge or collection file has already been opened at the Execution Office, or you are trying to sell the apartment and the Tax Authority is refusing the clearance certificate the Land Registry requires.
• The 30 days have already run. An extension application under Section 150 is possible but has to be supported with evidence of when the notice actually reached you abroad, and it is not granted for mere inconvenience.

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Speak With an Israeli Attorney

We take over the file at the assessing office, file the objection within the statutory window, and rebuild the real rental figures from bank records and tenancy documents rather than arguing about the Authority's estimate. The underlying filing duty is covered in our answer on whether non-residents must file an Israeli tax return.

Contact us for a confidential initial consultation.