NON-UK RESIDENT LANDLORDS
If you are non-UK resident, there are several tax laws specific to you that differ to those who do reside in the UK. The tax treatment for Non-Residents is usually more generous compared to residents, and broadly speaking, you will only pay UK tax on income that is arising in the UK. The most common source of income that continues to be taxed in the UK even if you don’t live here is any income from land and property, such as rental income or the sale of assets physically located here.
If you are a Non-Resident Landlord and receive rental income in the UK, you will need to complete a self-assessment tax return each year to declare your income – even if no tax is actually payable here.
Whether you are a first-time landlord or a seasoned investor, the actual landlord tax return process is the same and so we can help you no matter how big or small your property portfolio may be. At UK Tax Returns we will prepare your accounts and liaise with HMRC on your behalf so that your tax affairs are always kept up to date.
We are professional intermediaries that work for you, not for HMRC. We can discuss a wide range of taxation and your specific areas of concern. We can also discuss scenarios that you are considering and hypothetical situations that make the best use of tax planning.
Using a tax agent removes the general stress and hassle of trying to deal with a process that you may not fully understand or be familiar with. Often dealing with the tax office can be daunting and confusing so we will act as an intermediary and explain everything to you jargon free.
As authorised partners of HMRC, tax agents are specialist companies who are very familiar with the UK tax system – we understand what you can and can’t claim for a range of specific situations, and we aim to save you a lot of time and money.
At UK Tax Returns we have special agent dedicated phone lines direct to HMRC tax office which are not available to the general public. We can talk to HMRC about your tax affairs very quickly at any point, and we can access specialist guidance from technical advisers within HMRC whenever the need arises.
WHY USE A TAX AGENT?
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 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 correct 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, we can ensure that you are registered straight away and claim back any of the overpaid tax that has already been withheld.
MAJOR TAX CHANGES THAT HAVE AFFECTED LANDLORDS IN RECENT YEARS
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 agreements in place with all EU and some non-EU countries which allows nationals 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.
We will guide you through the process and inform you of the legally allowable tax deductible expenses which will help to reduce any tax liability that you may otherwise have. There is often confusion as to when certain expenses are allowed; we can explain this to you clearly and concisely so that you are confident with your landlord tax return.
Our service provides basic bookkeeping when preparing your property tax return. We will collate your monthly rental statements and offer to liaise directly with your letting agent if you have one. We provide a simple and clear fixed fee service of £285 per tax return covering one property, and if you own the property in joint names, the second persons’ tax return can often be reduced to £142.
We have prepared a help sheet specifically for Landlords with rental income so please contact us today to request this help sheet. Please also refer to the Rental Income section of our website for further information.
There has been a major shake up to the Buy to Let property sector in recent years with changes affecting many private landlords. Sadly in many cases this has caused an increase to the amount of tax that landlords need to pay.
Many of our Non-Resident clients are currently renting out their former UK home. Until recently, there were two generous reliefs available to those who sell a rental property that was formally their primary residence. However from April 2020 onwards, major tax reforms have effected these two reliefs – please refer to our Capital Gains Tax section for more information.
If you are seriously thinking of selling your former UK home it would be beneficial to understand the impact of recent CGT reporting changes. Speak to us today with regards to our Capital Gains forecasting service.
Non-Residents have received some favourable tax breaks in recent years with the most significant being the treatment of Capital Gains Tax when disposing of UK based assets. While most types disposals made by Non-Residents remain exempt from CGT; this has changed significantly in respect of both residential and commercial property. Please refer to our Capital Gains Tax section for more information.
WORKING WITH OVERSEAS LANDLORDS
Our company and working practices have been set up specifically with our overseas clients in mind. We are more than happy to call you overseas at a time suitable for you, or conduct our business via email - whatever suits you best. 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 we will do whatever we can to make the process as simple and efficient as possible, only taking up your time when it is essential.
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.
We also specialise in Residency issues and so will be on hand to guide you through the process of changing your residency status, or ensuring that you are aware of the relevant criteria and can maintain your non-UK Resident tax status.
The Non-Resident Landlord Scheme (NRL) was introduced by HMRC to ensure that all overseas landlords are correctly registered for Self-Assessment. The NRL scheme has been around for a while and places the responsibility to collect tax on your letting agent if you have one, or bizarrely your tenant if you don’t have a managing agent in place. Every non-resident landlord not registered under the scheme should have 20% tax deducted from their rental income at source.
HMRC are becoming quite strict on this issue with letting agents, and you may be asked for your NRL number in the near future – if you don’t have one then the letting agent will start to deduct 20% tax from your net rental amount each month and pay this tax over to HMRC on a quarterly basis.
As your tax agent, we can assist with providing the NRL form and ensure that this is processed by the correct department within HMRC. You will be provided with a NRL number which your letting agent, or tenant, will need to exempt you from having to pay tax at source on a monthly basis. This may be especially frustrating if no tax is actually owed to HMRC and you then need to claim a tax refund from HMRC. Contact us today; we will ensure that this vital form is processed.
NON-UK RESIDENT LANDLORD SCHEME
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