Non Resident Landlord Tax and Rental Property Taxation

Non Resident Landlord Tax

If you have rental income being generated from property in the UK, you may be liable to UK income tax on that income.
There is a procedure in place to enable rental income to be paid gross by being part of the Non-Resident Landlord Scheme. If you are not part of this scheme then either the letting agent or tenant must deduct 20% tax from your rental income and pay this across to HMRC. If you register for the Non-Resident Landlord Scheme you will be able to receive the rental income gross in the first instance. This does not mean however, that this income is tax free! This is a common assumption overseas landlord make and this income still has to be declared and any tax paid due paid to HMRC under normal Self Assessment rules.

Depending on your country of origin you may also qualify for the annual Personal Allowance meaning a good portion of your rental income is free of tax.

Rental Property Taxation

You pay tax on the rental profit of the property(s), that is, after all ‘allowable expenses’ have been claimed. Allowable expenses may vary from landlord to landlord but some of the more common expenses are:

Letting agent’s fees
Cleaning fees
Annual Gas Safe certificate renewal
Annual insurance costs
Repairs to the property (although care must be taken that these are not Capital in nature)
Loan interest costs (this is being restricted over the coming years)
Council tax
Ground rent

We can assist in ensuring you are claiming all the relevant expenses for your property. Please get in touch to discuss how we can help further.