Non-Resident Landlords

If a non-UK resident rents out their UK home, or receives rental income from any other property in the UK whilst living overseas, they will be required to register as a non-resident landlord with HMRC in order to get the UK rental income paid to them without 20% tax being withheld at source from the gross rents by the tenants/letting agents.

At the end of the tax year, the rental income and expenses will need to be reported to HMRC on a self-assessment tax return, along with the details of any time spent in the UK and any other reportable income.

It should be noted that the tax rules applying to UK residential property have changed every year since 2012 and are now particularly complex. We would be delighted to help navigate you through the complexity and to assist with preparing your rental accounts and the associated tax returns.

HMRC change of practice

A recent change of practice by HMRC has seen individuals with rental income being required to complete tax returns regardless of the level of rents.

In the past, HMRC generally only required individuals with rental income to file tax returns where either the gross rental income each year was more than £10,000 or the net rental profits, once all allowable expenses were deducted, exceeded £2,500. These limits no longer seem to apply.

If you have undeclared rental income, it is best to come forward as soon as possible. HMRC have a wealth of information at their fingertips these days and it is likely a case of “when” not “if” they will find out about any undeclared income.