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Non-Resident Landlord Scheme

Non-Resident Landlord Scheme

Old Jan 18th 2016, 6:02 pm
  #16  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by FatFrank View Post
Tirytory,
Yes, I use the Andica software for my UK return self assessment. I also complete the Residence and Remittance basis/allowance supplements. In that I mark that I was not resident in the UK for the tax year, that I had a home overseas, and that I am entitled to claim the personal allowance as a non resident, resident in the USA for tax purposes etc,......

This is how both PWC and Deloitte have previously completed my UK return when they were contracted to do that for me...?
I'm curious that's all. My understanding of it is is there are special exemptions but if you're Mr/Mrs Ordinary then you don't qualify. After all why would the UK government continue to give you a personal allowance when nothing is given back?

Did you put a special form in to claim personal allowance then? This was the first year I had to the remittance forms and I didn't see anywhere to mark anything. Admittedly I'm learning as I go
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Old Jan 18th 2016, 8:47 pm
  #17  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Tirytory View Post
I'm curious that's all. My understanding of it is is there are special exemptions but if you're Mr/Mrs Ordinary then you don't qualify. After all why would the UK government continue to give you a personal allowance when nothing is given back?

Did you put a special form in to claim personal allowance then? This was the first year I had to the remittance forms and I didn't see anywhere to mark anything. Admittedly I'm learning as I go

Tirytory,
I thought that all British nationals were entitled to the allowance, but I must admit I don't really know too much about it - in fact, I'm sure that there are people on here that have forgotten more about it than I know! Best to ask someone qualified to answer these questions, or hopefully someone qualified will chime in!
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Old Jan 18th 2016, 9:40 pm
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Default Re: Non-Resident Landlord Scheme

Originally Posted by FatFrank View Post
Tirytory,
I thought that all British nationals were entitled to the allowance, .....
They were, but I think it was withdrawn for non-residents. At very least it has been discussed recently. I have negligible UK income that isn't already taxed, so it doesn't impact me either way.
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Old Jan 19th 2016, 2:17 pm
  #19  
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Default Re: Non-Resident Landlord Scheme

Someone on here linked to form R43. This is entitled 'Claim to personal allowances and tax repayment by an individual not resident in the UK'. The title seems clear, but after a brief chat with HMRC I'm not convinced it's applicable. As there are so many of us in the same situation it would be great to nail the facts and add to the wiki.

Can anyone answer definitively which forms need to be completed by a British citizen who is tax resident in the US and is renting out a UK property?
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Old Jan 19th 2016, 8:39 pm
  #20  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Ferrino View Post
Thanks for all your help! My next question is: can all these details concerning a foreign property be handled by tax software such as H&R Block? Or do you really need to file through a professional when you are receiving rental income and listing all the deductions, like depreciation etc?
If you use H&R block remember to buy the Rental property edition. Also when entering the property details check the special conditions box and it will do the 40 year depreciation etc.

Turbo tax is similar. Just makes sure you have answered the question about being a foreign property.

you letting agent will need to be registered with the HMRC if they are not already.
You need to apply for self assessment.

I have used both a CPA specializing in expats and turbotax/HR block and found very little difference in the advice. There are also some blog sites.
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Old Jan 19th 2016, 8:42 pm
  #21  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Pulaski View Post

FWIW US property is depreciated over 26.5 years.
it used to be 15 years and is now 27.5 years. I am not old enough to remember the 15 year option.
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Old Jan 19th 2016, 8:46 pm
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Tirytory View Post
So I've done my self assessment already this year as I rent a house out too. I used one of the software listed (ABC I think) to complete the relevant forms. If you live abroad you can't just use Self Assessment,you have to complete additional remittance forms also. Also I'm fairly sure you're not entitled to a personal allowance. I had to pay tax this year and I wouldn't have needed to if I had a personal allowance.
UK Expats - Income Tax Personal Allowance Lives On | GM Expat Tax

ends in 2017 apparently. however I think as a US resident/citizen the US has first dibs on the tax. Will that be deductible against UK taxes, not sure.

It appears the UK Govt is trying to kill off the private rental market.
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Old Jan 20th 2016, 2:12 am
  #23  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by mrken30 View Post
UK Expats - Income Tax Personal Allowance Lives On | GM Expat Tax

ends in 2017 apparently. however I think as a US resident/citizen the US has first dibs on the tax. Will that be deductible against UK taxes, not sure.

It appears the UK Govt is trying to kill off the private rental market.
Great post, mrken. I was getting worried about out last few years UK returns until I read your link, but will sleep a lot better tonight, LOL.
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Old Jan 20th 2016, 2:49 am
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Default Re: Non-Resident Landlord Scheme

Originally Posted by mrken30 View Post
UK Expats - Income Tax Personal Allowance Lives On | GM Expat Tax

ends in 2017 apparently. however I think as a US resident/citizen the US has first dibs on the tax. Will that be deductible against UK taxes, not sure.

It appears the UK Govt is trying to kill off the private rental market.
On the contrary, I believe they are just trying to keep it from dominating the housing market and endangering the mortgage banks and potentially the economy. To this end they are just reducing the tax incentives to be a private landlord. In truth it would have made more sense to reduce the tax incentives for being a private landlord progressively shortly after the removal of the mortgage interest deduction for homeowners. That would almost certainly have moderated the dramatic house price inflation in the UK in recent years, which has been allowed to inflate a massive bubble that, if it is allowed to burst, will lead to a sharp drop in the price of houses and a massive negative equity situation.

The danger will be that, unlike homeowners, private landlords facing a hopeless negative equity situation are much more likely to just abandon the house, which if it is only saleable at, say, half its price when bought on finance, say, five years ago, could leave the mortgage bank suffering a heavy loss. E.g. price: £300,000, amount financed: £240,000, amount paid off the principal over five years: £10,000, post-collapse sale price: £150,000, loss to bank: £80,000!

Last edited by Pulaski; Jan 20th 2016 at 4:37 am.
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Old Jan 20th 2016, 2:54 am
  #25  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by mrken30 View Post
UK Expats - Income Tax Personal Allowance Lives On | GM Expat Tax

ends in 2017 apparently. however I think as a US resident/citizen the US has first dibs on the tax. Will that be deductible against UK taxes, not sure.

It appears the UK Govt is trying to kill off the private rental market.
Last I had read was no change had been decided, but if there was a change it wouldn't happen until 2017. So at the moment means nothing will change for tax allowance for non residents. Fingers crossed it stays that way, keeps it simple for those with rental profits in the uk below the allowance; I don't even file a return in the uk anymore, just declare it in the USA and pay the tax to the irs.
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Old Jan 20th 2016, 4:21 am
  #26  
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Default Re: Non-Resident Landlord Scheme

They have also made tenants of HMOs responsible for council tax, implemented more and more controls on housing quality(which is good). Forced water meters on HMOs. So the low cost housing no longer exists. Where once a self contained bedsit in a shared house was quite affordable, now you have a water bill and a council tax bill whereas before the landlord would quite often include the fixed cost in the rent. For example a band B house gets turned into 3 band A properties.
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Old Jan 20th 2016, 1:50 pm
  #27  
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Default Re: Non-Resident Landlord Scheme

I'm confused. Had I been allowed a personal allowance and didn't make a profit over that (definitely not) why did I have to pay tax? Admittedly it was a nominal amount but the personal allowance would have meant none to pay.
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Old Jan 20th 2016, 2:57 pm
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Tirytory View Post
I'm confused. Had I been allowed a personal allowance and didn't make a profit over that (definitely not) why did I have to pay tax? Admittedly it was a nominal amount but the personal allowance would have meant none to pay.
You would have to contact HMRC. I even got a tax rebate from over paying tax in previous years. If you used a tax preparer ask them, they do not always get things correct, then again nor do HMRC.

HMRC is fully aware that I am not a UK resident and send all my mail to my US address.
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Old Jan 21st 2016, 2:23 am
  #29  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by Tirytory View Post
I'm confused. Had I been allowed a personal allowance and didn't make a profit over that (definitely not) why did I have to pay tax? Admittedly it was a nominal amount but the personal allowance would have meant none to pay.
Probably didn't tick the boxes indicating non-resident status and eligible for PA on the tax returns..? As long as I tick those boxes Andica calculates that I don't owe anything (house is our only UK income.)

Last edited by FatFrank; Jan 21st 2016 at 2:27 am.
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Old Jan 21st 2016, 3:07 pm
  #30  
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Default Re: Non-Resident Landlord Scheme

Originally Posted by FatFrank View Post
Probably didn't tick the boxes indicating non-resident status and eligible for PA on the tax returns..? As long as I tick those boxes Andica calculates that I don't owe anything (house is our only UK income.)
Thank you!

Phoned them this morning! Indeed I didn't tick Box 16/17 on form 109, so I now a tax refund on its way to me.

Do I now just get taxed in Canada on this do I? Through to duel taxation laws. I wish I understand all of this! Sorry for hijacking thread op and thank you for starting it!!!!
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