If you live overseas and own properties in the UK then there are a number of tax laws that will be specific to you that differ to those landlords who do reside in the UK. The most significant difference is that you will need to inform HMRC that you have sold a property within 30 days from the date the sale completed. You will still have until 31st January the following year to pay any tax that is due in most cases, but it is important that we declare the correct figures to HMRC within their set timescales.
Non-Resident landlords were also subject to very generous tax breaks in the past which came to an end in April 2015. Prior to this, any Capital Gains disposal was entirely exempt from tax to all of those who are assessed as being Non Resident at the time of the asset disposal. The good news is that up until April 2015 the gain is still exempt from tax, and the only tax that will need to be paid is if the asset has increased in value from April 2015 up to the date when you sold the property.
This means that many overseas investors have benefited from this tax break and pay very little Capital Gains tax. If you ever lived in the property in the past as your main home then there is a chance that we can even reduce your CGT bill to zero by claiming other allowable reliefs.
The tax return deadlines for filing your standard tax return to declare your rental income is the same as being 31st January.
Our company and working practices have been set up with our overseas clients in mind. We are more than happy to call you if you wish, day or night, or conduct our business via email - whatever suits you. We will also gladly liaise directly with any UK based service providers such as letting agents so that you don’t have to. We understand that your time is precious so will do whatever we can to make the process as simple and efficient as possible, only taking up your time when we absolutely need to.
Looking to the future, we keep our clients updated on any significant tax regime changes that may have a positive or negative effect on the running of their rental income or property trading business. Should any changes need to be made to your current property structure we will be there to guide you through the process so that you don't have to try and do everything on your own.
Working with overseas Landlords
What is the Non Resident Landlord Scheme?
The Non-Resident Landlord Scheme was introduced in April 1996 and allows Landlords to receive all of their rent without tax being withheld at source. If you live overseas and rent out a property in the UK then you will need to complete an NRL1 form which will register you under the scheme. Most good letting agents should make you aware of this option and provide you with the form.
If you have not previously registered under the non resident landlord scheme and have to date been paying the 20% tax at source collected from your rent then we can ensure that you are registered straight away and claim back any of the overpaid tax that has already been withheld.
NON-RESIDENT LANDLORDS FAQ's
Will I receive my tax free allowance if I live overseas?
If you are a UK citizen you will automatically receive your tax free allowance regardless of where you now live. The UK also has double taxation agreements in place with EU and some non-EU countries which allows nations of other countries to also receive the tax free allowance in the UK. Contact us today and we can confirm if this will apply to you.
Do I have to pay tax on my Capital Gain if I live overseas?
The tax law changed in April 2015 and prior to this non-resident property owners were exempt from paying Capital Gains tax in the UK. From 6th April 2015 your property investment will be liable to tax, but only on any gain that you have made on the property value after this date. Speak to a specialist tax consultant today to fully discuss this generous tax break.