The non-resident landlords scheme and letting a UK property whilst you live abroad.
This whole subject can be a minefield and can be routinely misunderstood by many people who move to live abroad, either temporarily or permanently, but rent out either their previous home or any other property in the UK. Leaving the UK does not mean that you are not liable to pay tax in the UK on the rental income ARISING in the UK. There are heaps to jump through as part of the non-resident landlord scheme but you will still be required to file a UK self assessment tax return whilst you are abroad declaring usually just the rental income itself if you have no other income arising in the UK, you do not need to declare your income arising abroad. But obviously you may need to file a tax return abroad.
Briefly here is an overview but it has to be said that many people departing these shores are not part of this scheme and may find themselves under Enquiry when all years for which tax is due will be assessed by HMRC. The scheme requires a good deal of forward planning:
- The Non-resident Landlords Scheme (NRLS) taxes the UK rental income of people whose ‘usual place of abode’ is outside the UK.
- A ‘letting agent’ includes anyone who manages property on behalf of a non-resident landlord and they must deduct tax from the landlord’s rental income and pay the tax to HMRC on the landlord’s behalf.
If the landlord does not have a letting agent, and you are a tenant paying rent of £100 a week or less, you do not have to use the scheme unless you’re told to do so by HMRC.
If you’re a letting agent, you must use the scheme regardless of the amount of the rent.
The good news is you do not need to be involved in this onerous process if HMRC has told the landlord in writing that they are approved to receive the rental income with no tax deducted.
All non-resident landlords can apply to HMRC for approval to receive their rental income in full with no tax deducted, and HMRC will give approval and register the landlord for self-assessment if their UK tax affairs are up to date.
If you believe that you have some offshore rental income to declare, or some UK rental income to declare whilst living abroad, contact us as below. HMRC operates numerous exchanges of information pacts with other countries and one day will find out not only where you live, but whether you still own a property in the UK or are renting one out abroad.
Contact Andy on 07879 464577 or Lindsay on 07584 706664
Or complete our contact form to send us an email to which we will give you a prompt reply.
