Non-resident owners of residential, commercial or furnished holiday lets are required to pay tax on income earned on the property and are subject to Capital Gains Tax (CGT) when the property is sold. All landlords who are not resident in the UK must join The Non-resident Landlord Scheme (NRL).
A landlord can apply to HMRC to have the rent paid without deduction. If they do not, the tenant or letting agent are required to withhold tax and complete an annual return to HMRC. The exception is when the rent is less than £100 per week, a tenant is not required to withhold tax but a letting agent is still required to do so.
The letting agent or tenant must register for the NRL scheme within 30 days of the tenancy starting unless HMRC have advised them in writing that the landlord can be paid without deduction.
The letting agent or tenant must calculate the tax to be withheld. The tax is calculated on the rental paid less any expenses the letting agent or tenant has paid on behalf of the landlord. Tax should be withheld at the basic rate of income tax. If the non-resident landlord is a company the tax withheld should be at the corporation tax rate.
The HMRC forms for non-resident landlords, tenants and letting agents can be found on the gov.uk website. If you need advice or assistance on completing the forms please contact us through our contact page or by email to firstname.lastname@example.org or by phone 07473 938867.
While we have made every effort to provide accurate and up to date information on our website, the law is constantly changing and affects each person or business in different ways. We will not accept liability if you rely solely on this information, professional advice should always be obtained before making a financial decision.