Where to save rental income in the UK?
Sep 16th 2019, 3:28 pm
#1
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Joined: Mar 2009
Posts: 331
Where to save rental income in the UK?
Hi all.
I have a house in the UK that I let and as such I make some rental money on, over and above my mortgage and management fees. I don't believe the amount is worth transferring on a monthly basis and so it can stay in the UK and accumulate for me.
I pay tax in the UK on the property and I was informed by my agent I will always have to pay it in the UK regardless of where I live as its a tax liability. By the same token though I believe the rules surrounding saving tax free in the UK whilst overseas are different, in that I cant.
At the moment the rental goes into buying Premium Bonds, flexible but not ideal. I would prefer an ISA or such but again I don't think this is an option.
Would anybody be able to advice, confirm or make suggestions whether this is true or what options I have?
Many thanks.
Lamin
I have a house in the UK that I let and as such I make some rental money on, over and above my mortgage and management fees. I don't believe the amount is worth transferring on a monthly basis and so it can stay in the UK and accumulate for me.
I pay tax in the UK on the property and I was informed by my agent I will always have to pay it in the UK regardless of where I live as its a tax liability. By the same token though I believe the rules surrounding saving tax free in the UK whilst overseas are different, in that I cant.
At the moment the rental goes into buying Premium Bonds, flexible but not ideal. I would prefer an ISA or such but again I don't think this is an option.
Would anybody be able to advice, confirm or make suggestions whether this is true or what options I have?
Many thanks.
Lamin
Sep 16th 2019, 4:48 pm
#2
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Location: Whitby, Ontario
Posts: 730
Re: Where to save rental income in the UK?
I’m not sure that is sound advice from your letting agent. We are registered as non resident landlords for our UK house which means we pay tax here in Canada rather than the UK. There is a form to complete - NRL1 - which means you get your income without the tax taken off in the UK. Perhaps there are particular circumstances where it’s better to do as you suggest? But we find it easier to lump in the income minus allowable expenses and declare to the CRA with everything else.
Sep 16th 2019, 8:59 pm
#3
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Posts: 2,485
Re: Where to save rental income in the UK?
I think you advice tgat you will alwats pay UK tax on it us wrong.
Also no chance of an ISA or a new savings account as you are non resident. Surprised you can buy premium bonds.
Also no chance of an ISA or a new savings account as you are non resident. Surprised you can buy premium bonds.
Sep 17th 2019, 3:43 am
#4
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Re: Where to save rental income in the UK?
https://britishexpats.com/wiki/Tax_o...me_from_Canada
The wiki might help with the tax situation.. don't forget also if your property is worth more than $100,000 (all property overseas, including cash in bank accounts, premium bonds, investment accounts, bricks and mortar) you must submit form T1135.
Your letting agent is incorrect I believe.
The wiki might help with the tax situation.. don't forget also if your property is worth more than $100,000 (all property overseas, including cash in bank accounts, premium bonds, investment accounts, bricks and mortar) you must submit form T1135.
Your letting agent is incorrect I believe.
Sep 17th 2019, 8:31 pm
#5
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Joined: Aug 2017
Location: Toronto
Posts: 128
Re: Where to save rental income in the UK?
I’m not sure that is sound advice from your letting agent. We are registered as non resident landlords for our UK house which means we pay tax here in Canada rather than the UK. There is a form to complete - NRL1 - which means you get your income without the tax taken off in the UK. Perhaps there are particular circumstances where it’s better to do as you suggest? But we find it easier to lump in the income minus allowable expenses and declare to the CRA with everything else.
UK government under George Osborne made overseas landlords declare rental income and pay tax.
This is the whole reason your letting agent was deducting at source - because you are overseas they have to, unless you have permission from HMRC to receive the whole amount (and agree to fill in tax returns).
Sep 18th 2019, 3:08 am
#6
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Re: Where to save rental income in the UK?
(not an accountant, this is my understanding...) You still have to declare the income in the UK I believe. My UK accountant has me do tax returns for UK rental income still.
UK government under George Osborne made overseas landlords declare rental income and pay tax.
This is the whole reason your letting agent was deducting at source - because you are overseas they have to, unless you have permission from HMRC to receive the whole amount (and agree to fill in tax returns).
UK government under George Osborne made overseas landlords declare rental income and pay tax.
This is the whole reason your letting agent was deducting at source - because you are overseas they have to, unless you have permission from HMRC to receive the whole amount (and agree to fill in tax returns).
Get your rent in full
If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.
If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.
(That's when the double taxation agreement would fit in I believe - https://www.gov.uk/tax-uk-income-liv...ad/taxed-twice )If you want to pay tax on your rental income through Self Assessment, fill in form NRL1i and send it back to HMRC.
If your application is approved, HMRC will tell your letting agent or tenant not to deduct tax from your rent and you’ll need to declare your income in your Self Assessment tax return.
Last edited by Siouxie; Sep 18th 2019 at 3:13 am.
