Landlord Living Abroad

NRL1 Form needs to be completed

Overview

You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:

• pension
• rental income
• savings interest
• wages

If you’re eligible for a Personal Allowance you pay Income Tax on your income above that amount. Otherwise, you pay tax on all your income.

The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice.

You don’t normally pay tax when you sell an asset, apart from on UK residential property.

When to report your income to HMRC 

You usually have to send a Self Assessment tax return if:

• you rent out property in the UK

You don’t need to report your income to HMRC if you’ve already claimed tax relief under a ‘double-taxation agreement’.

Sending a Self Assessment tax return

You can’t use HMRC’s online services to tell them about your income if you’re non-resident. Instead, you need to:

• send your tax return by post
• use software
• get help from a professional, e.g. an accountant

Fill in the ‘residence’ section (form SA109 if you’re sending it by post) to tell HMRC you’re non-resident. Fill in any sections relating to your type of income.

You’ll be fined if you miss the deadline - it’s earlier if you’re sending your return by post (31 October).

Non Resident Landlords – Capital Gains TAX

Individuals affected:

Non-UK residents of residential property situated in the UK upon potential sale of their property.

Background

Prior to April 2015, non UK resident individuals disposing of assets located in the UK were not subject to UK Capital Gains Tax. This meant that residential property situated in the UK could be disposed of free from UK Tax, irrespective of the nature of its use.

Rules from April 2015

With effect of 6th April 2015 (and with properties with legal exchange date from this point onwards) non-UK resident property owners must report sales of UK residential property to Her Majesty’s Revenue and Customs within 30 days of completion and calculate any non Resident Capital Gains Tax due.

Reporting Requirements

Reports can be made online to HMRC and should contain the name and address of the individual disposing of the residential property (or an interest in the residential property), the address of the property, details of any tax agent assisting with tax returns or the declaration and a calculation of any gain and tax due.

A report should be made in respect of all relevant disposals, regardless of whether a gain or loss has been realised and regardless of whether any tax is due to HMRC.

A report must be made even in the cases where a self assessment tax return is due to be filed with HMRC.