The following only applies to individuals:
If you are a landlord and you are resident abroad for 6 months or more per year, HM Revenue and Customs (HMRC) classes you as a non-resident landlord. (Note that this criterion for non-residency is different from that of non-residency for tax purposes.)
Non-resident landlords may have to pay tax on their rental income and may also have to pay tax if gains are made when residential properties in the UK are sold.
Tax can be declared and paid via either:
– self assessment if HMRC allows this;
– deduction at source by the letting agent or tenant.
If tax is deducted at source by the letting agent, expenses incurred can be deducted from the gross rent before tax is calculated. If there is no letting agent involved, the tax is calculated and paid to HMRC by the tenant if rent exceeds £100 per week.
Non-resident landlords who do not want tax deducted at source and prefer the self assessment route can apply for HMRC’s approval by completing THIS FORM.
Note that HMRC’s online services is not available to non-resident landlords. If self assessment is approved, tax returns must be made by post or via approved software or through an accountant.
The annual deadline for postal tax returns is 31 October. Late returns will incur a penalty.