address some of the practical aspects to help tax payers get ready for the change. It is also worth noting that plans are tentatively in place for a 3% stamp duty surcharge for all non-UK tax residents who are purchasing a property, whether they’re a company or individual. If you do not have a user ID, you can create one when you apply. All rights reserved. Letting agents, tenants or anyone else securing renters on behalf of the overseas landlord will need to pay tax on any rent due to the landlord. Here is some advice on why you should have wallpaper in your home and everything else you should know about it. If approved, the rental income will be paid gross; however, it is still liable to UK tax in the normal way and the NRL will be required to file a UK tax return. However, the Finance Act 2019 introduced legislation to move such companies into Corporation Tax (CT) with effect from 6 April 2020. NRL6 - Non-resident: certificate of tax liability to be provided to non-resident landlords by UK letting agents or tenants Expats who rent out their UK property must register with the taxman’s non-resident landlord scheme. Non-resident trusts are also liable to UK tax on UK property income and the Tax Return filing deadline for these trusts is 31 October after the end of the UK tax year (5 April). You have a wide choice of tenant referencing sites in the UK like NLA Tenant Check, Lettingref and Rent4Sure to access UK Tenant Data, we break down your options as a landlord. So for example, 2014-15 year non-resident Trust Tax Returns need to be submitted to HMRC by 31 October 2015 to meet this deadline and avoid penalties. works with overseas landlords in over 12 cities worldwide, A company letting a property that is registered outside of the UK, A member of the Crown servants or armed forces, Get finances in place (either with a mortgage or personal funds), Arrange for conveyancers to conduct a property check to confirm its condition, Employ solicitors to handle the legalities, 40% on earnings from £37,501 to £150,000, Any fees for securing tenants should be deducted from the rent collected directly, The amount of rent collected is no more than three months in advance with tax due amounting to less than £100. Our guide helps make sense of it. NRL3 - Application to receive UK rental income without deduction of UK tax - non-resident trustees This is when you own property in the UK but reside in another country. There was an error. 1.2 Letting agents of a non-resident landlord must: deduct tax from the landlord’s UK rental income; and pay the tax to HMRC’s Accounts Office, Shipley (see paragraph 1.16 below). The guidance does not apply to non-resident companies which have tax deducted under the non-resident landlord scheme and are not required to file a tax return; to those starting a UK property business on or after 6 April 2020; or those filing file an income tax return that is not a non-resident company income tax return (SA700). Use form NRL5 if you’re a letting agent with different branches and you want each branch to be separately responsible for operating the NRL scheme. Use form NRL2 to apply to get your UK rental income without tax taken off. We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services. Use form 64-8 to authorise HMRC to communicate with your tax representative about your tax affairs. As agents based in the UK, we pay rental income to landlords regularly, however, if the landlord is considered a 'non-resident' UK landlord, its the responsibility of the agent to ensure tax affairs have been put in place. London, in particular, attracts investors from all around the globe who are looking to increase their long-term capital while boosting short-term income. As a non-resident landlord you are required to register with HMRC under the Non Resident Landlord Scheme. Don’t worry we won’t send you spam or share your email address with anyone. Non-resident companies owning UK property are currently subject to income tax under the non-resident landlord scheme. Use form NRL6 if you’re a UK letting agent or tenant who has deducted tax from the rental income of a landlord based outside the UK. How can a non-resident landlord buy property in the UK? NRLY - Non-resident landlord: Annual Information Return This is actually quite straightforward, but here's what you would need to know. The scheme requires local letting agents/tenants to deduct 20% from any rent they collect/pay to non-resident landlords, unless they have authority from the UK tax authority to pay the rental income without deducting 20% income tax. The statutory residence test and the tax implications in the UK. This applies whether or not the individual is UK resident. For the purposes of the NRLS, the tax year runs from 1 April to 31 March. Please try again later. Whether the rental figure is above or below £100 per week, tenants still need to file an annual tax return to HMRC which declares how much they have paid in rent. Tenants who pay rent that amounts to less than £100 a week to a non-resident landlord directly (or to a third-party) that isn’t an official letting agent won’t need to withhold any tax since it is below the threshold for the year. You’re able to get overseas and non resident landlord insurance that will allow you to continue living overseas and still benefit from the income you get from letting property in the UK. The result means that you will pay tax by the deadline of January 31st each year, rather than it being withheld by the agent or tenant. They would also need to file an annual return to HMRC, declaring the amount of rent they have collected on behalf of the landlord. Completing a self-assessment tax form can be daunting and complicated, and there are special rules for non-resident landlords. As a landlord, you can enjoy guaranteed monthly rental income and no void periods while our local team takes care of tenant relations, property repairs and rent collection on. If you are a non-resident of the UK and/or you have your “normal place of abode” outside the UK you need to register with HMRC as non-resident landlord if you receive income from letting out UK property. Tax returns and your responsibilities as a non-resident landlord. The United Kingdom is one of the most sought-after places in the world for buy-to-let properties, and it is seen as a primary method for bricks and mortar investment. However, no dates have been set for when the change will come into effect. We use cookies to personalize content and ads, to provide social media features and to analyze our traffic. However, tax rules around owning rental property in the UK differ for non-resident and resident landlords. Looking to decorate your London rental property? The NRLS is a scheme to tax the UK rental income of persons who have a usual place of abode outside the UK – known as non-resident landlords. HMRC are creating new versions of their forms that do not depend on Adobe Reader. Instead, non-resident landlords must file a self-assessment tax return where rental income is declared. 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