You are using an outdated browser. Upgrade your browser today for a better experience of this site and many others.
Q: I used to live in the UK but have recently moved abroad. I have a residential property in the UK which I let out, a friend has mentioned that I should be receiving the income with tax deducted, is that correct?
A: As a non-resident you remain liable to UK income tax on rental profits arising from a property in the UK. You should therefore register under the Non-Resident Landlords Scheme. The scheme requires the letting agent to deduct basic rate tax (currently 20%) on the amount of rent received less any allowable expenses paid by the letting agent or tenant.
If you do not have a letting agent and the tenant pays you more than £100 per week then the tenant will be required to deduct the tax. The letting agent or tenant is required to account for income tax due on a quarterly basis. They should also complete an annual information form and provide the non-resident landlord with a tax deduction certificate.
It is, however, possible to apply to HMRC to receive the rental income gross. If the application is successful, HMRC advises the letting agent or tenant not to deduct tax from any rental payments and tax is paid via the self assessment system. An application can be made provided the landlords UK Tax affairs are up to date.
Have you got a question you would like us to answer in our column? If so please email your query to thebusinessbrain@renniewelch.co.uk
Thank you for reading this article. To receive more similar information, guidance on other areas of interest, or to arrange a follow up, please record your details here.
Invaluable accountancy and tax insights delivered straight to your inbox!
We are looking for an experienced Audit Senior to join our expanding audit department to assist with managing a diverse and rewarding client portfolio. A qualified/semi-qualified accountant you will work along side the audit manager and partners in managing and delivering audits, and also benefit from ongoing support and development.
Many will be aware of the pending changes from 6 April. Broadly the Chancellor announced a 1.2% increase to 15% and a reduction in the salary threshold from £9,100 to £5,000. At the same time the employer Annual Allowance will also change.
This may mean that some employers might be due to pay payroll taxes for the first time. With this comes questions and also planning opportunities as to what is the most tax efficient strategy, particularly for company directors.
For guidance and advice on this please get in touch.