If you let out residential or commercial property in the UK, and live abroad for six months or more each year, HM Revenue & Customs (HMRC) regards you as a non-resident landlord, even if you are UK resident for tax purposes.
If you are a non-resident landlord, you can choose to receive your rent:
- in full and pay tax due through self assessment – HMRC will not approve your application to receive rent in full unless you are up to date with all your UK tax obligations or you do not expect to have any UK tax liability in the year in which the application is made
- with basic tax already deducted by your letting agent or tenant (after allowing for any expenses they have paid), who will give you a certificate at the end of the tax year saying how much tax they have deducted. If you do not have a letting agent and your tenant pays you more than £100 a week in rent, they should deduct the tax from their rent payments to you and pay the tax over to HMRC.
Landlords may still be entitled to UK personal allowances (which can be used against letting income) despite being non-resident. The main categories of those entitled are British and European Economic Area citizens.
Milsted Langdon can provide comprehensive advice and practical support to non-resident landlords, with services including:
- advising on suitable ownership structures for UK property
- registering you as a non-resident landlord
- advising on what expenses are allowable
- calculating tax liabilities and preparing and submitting annual tax returns
- acting as your UK tax agent
- arranging payment of tax liabilities.