non resident landlord scheme, rental income taxation help
#1
Just Joined
Thread Starter
Joined: Sep 2008
Posts: 25
non resident landlord scheme, rental income taxation help
Guys
I cant get a search on this but if anyone knows can you please point me in the right direction
I am a new soon to be expat and I have a house in the UK which I intend to rent out thus it will not be available for my use.
I have looked into the Non Resident Landlord Scheme which appears to apply to my situation - does anyone use this?
If so, I presume that because I am non-resident in the UK for tax that I am not entitled to a personal income tax allowance meaning all rental income would be subject to taxation. what rate would this be at, 20%?
It looks as though my tentant deducts 20% from the rent due and pays this tax direct to HMRC for me unless I am approved for the Landlord scheme?
Any pointers would be great, thanks
I cant get a search on this but if anyone knows can you please point me in the right direction
I am a new soon to be expat and I have a house in the UK which I intend to rent out thus it will not be available for my use.
I have looked into the Non Resident Landlord Scheme which appears to apply to my situation - does anyone use this?
If so, I presume that because I am non-resident in the UK for tax that I am not entitled to a personal income tax allowance meaning all rental income would be subject to taxation. what rate would this be at, 20%?
It looks as though my tentant deducts 20% from the rent due and pays this tax direct to HMRC for me unless I am approved for the Landlord scheme?
Any pointers would be great, thanks
#2
Re: non resident landlord scheme, rental income taxation help
You trust your tenant to pay 20% to the government?
Really?
Really?
#3
Just Joined
Thread Starter
Joined: Sep 2008
Posts: 25
Re: non resident landlord scheme, rental income taxation help
lol, there is no issue with trust there
Last edited by Graduate QS; Mar 9th 2013 at 9:48 am.
#4
Re: non resident landlord scheme, rental income taxation help
Not sure that's how it will work from April 1st, look at earlier information from Meow
#5
Re: non resident landlord scheme, rental income taxation help
Guys
I cant get a search on this but if anyone knows can you please point me in the right direction
I am a new soon to be expat and I have a house in the UK which I intend to rent out thus it will not be available for my use.
I have looked into the Non Resident Landlord Scheme which appears to apply to my situation - does anyone use this?
If so, I presume that because I am non-resident in the UK for tax that I am not entitled to a personal income tax allowance meaning all rental income would be subject to taxation. what rate would this be at, 20%?
It looks as though my tentant deducts 20% from the rent due and pays this tax direct to HMRC for me unless I am approved for the Landlord scheme?
Any pointers would be great, thanks
I cant get a search on this but if anyone knows can you please point me in the right direction
I am a new soon to be expat and I have a house in the UK which I intend to rent out thus it will not be available for my use.
I have looked into the Non Resident Landlord Scheme which appears to apply to my situation - does anyone use this?
If so, I presume that because I am non-resident in the UK for tax that I am not entitled to a personal income tax allowance meaning all rental income would be subject to taxation. what rate would this be at, 20%?
It looks as though my tentant deducts 20% from the rent due and pays this tax direct to HMRC for me unless I am approved for the Landlord scheme?
Any pointers would be great, thanks
As a non-resident you are still entitled to a personal allowance, so only rental income above that level is taxable.
Your tenant does not pay the tax if you register for a Non Resident LL scheme, rather you receive income gross and are liable for any tax your self.
Other relevant info can be found on my financial blog - link below.
#6
Forum Regular
Joined: May 2011
Posts: 35
Re: non resident landlord scheme, rental income taxation help
Hi Meow, that's a really informative and useful blog you run there. I've just read your article on non resident landlord status - can mortgage payments be offset against your personal allowance? So if I receive 10k a year in rent from a UK property but my mortgage is 8k, am I only liable for tax on the 2k (which would fall within my allowance anyway)?
Thanks
B
Thanks
B
#7
BE Enthusiast
Joined: Mar 2012
Posts: 344
Re: non resident landlord scheme, rental income taxation help
Hi Meow, that's a really informative and useful blog you run there. I've just read your article on non resident landlord status - can mortgage payments be offset against your personal allowance? So if I receive 10k a year in rent from a UK property but my mortgage is 8k, am I only liable for tax on the 2k (which would fall within my allowance anyway)?
Thanks
B
Thanks
B
#8
Re: non resident landlord scheme, rental income taxation help
Hi Meow, that's a really informative and useful blog you run there. I've just read your article on non resident landlord status - can mortgage payments be offset against your personal allowance? So if I receive 10k a year in rent from a UK property but my mortgage is 8k, am I only liable for tax on the 2k (which would fall within my allowance anyway)?
Thanks
B
Thanks
B
Do you mean can rental income be part of your personal allowance? If so, yes. Rental income is UK income, but the gross amount can be reduced by both mortgage interest payments and some other costs.
http://www.hmrc.gov.uk/international/nr-landlords.htm
You know where I am if you want anything else
#9
BE Forum Addict
Joined: Jun 2008
Location: Abu Dhabi by body and Sydney by soul
Posts: 1,841
Re: non resident landlord scheme, rental income taxation help
Mrblast, i don't think you can offset your mortgage payments against your rental income. I think you can so something like that in Oz though?
#10
Re: non resident landlord scheme, rental income taxation help
You can offset mortgage interest and various other associated costs.
#11
BE Forum Addict
Joined: Jun 2008
Location: Abu Dhabi by body and Sydney by soul
Posts: 1,841
Re: non resident landlord scheme, rental income taxation help
#12
Re: non resident landlord scheme, rental income taxation help
Depends on the size of the mortgage and many people who let their property are being charged a higher rate of interest. Rates are very low compared to historical levels though.
#15
Re: non resident landlord scheme, rental income taxation help
Allowable expenses include:
- water rates, council tax, gas and electricity
- maintenance and repairs to the property (but not improvements)
- and contents insurance
- interest on a mortgage to buy the property
- costs of services, including the wages of gardeners and cleaners
- letting agents fees
- legal fees for lets of a year or less, or for renewing a lease of less than 50 years
- accountant’s fees
- rents, ground rents and service charges
- other direct costs such as phone calls, stationery and advertising for new tenants
The expense should be incurred wholly and exclusively as a result of renting out your property, but in many cases the tenant pays the council tax so it's academic.