Property Owner UK rental income tax guide

Do you know what tax to pay on your rental income from UK properties? We de-mistify this issue in this guide, and lay out all the basics. A particular focus is given to non-resident landlords who live outside of the UK.

If you do not reside in the UK (i.e. if you live abroad for 6 months or more per year), you are classified as a ‘non-resident landlord’ by Her Majesty’s Revenue and Customs (HMRC), even if you are a UK resident for tax purposes. You should make an application to HMRC to receive your rental income from us at RentLondonFlat.com without deduction of UK tax by joining the Non Resident Landlord Scheme (NRLS).

referencing

Applications to join the NRLS

Applications to join the NRLS can be made by downloading the appropriate form from the HMRC website:

1. NRL1i – if you are an individual landlord (Please note if the property is jointly owned, each non-resident owner will need to complete a separate application form.)
2. NRL2i – if the rental property is owned by a company

As we are acting as your letting agent, the reference details you will need to provide to HMRC about us are given below:

Letting Agent: RentLondonFlat.com
Address: Bentinck House, 3-8 Bolsover St, Fitzrovia, London, W1W 6AB
Agent Reference Code: 904/NA 050433

hassle free

Once your application is approved

Once your application is approved, HMRC will issue us a notice to confirm that no tax needs to be deducted from your rent before remitting the rent to you.

It should be remembered that acceptance to NRLS is an approval to receive rental income gross. It is not an exemption from tax liability and you still need to arrange to have your income assessed and tax paid to HMRC separately.

If you have not yet appointed a tax accountant, we would be more than happy to refer you to our trusted accounting associates who are able to assist you with all your UK tax affairs.

In cases where you already held NRLS status with a previous agent other than RentLondonFlat.com, you will need to write to HMRC and request a change of letting agent on their records, and to provide given them with our agency reference code as above. This is because such NRLS notices are not transferable between agents or tenants, and we are obliged to deduct tax as described at the start of this guide until we receive contrary notice from HMRC.

regulations

If the NRLS application is not made to HMRC

If the NRLS application is not made to HMRC, we are obliged to deduct 20% tax from your quarterly rent (net of allowable deductions) and pay that to HMRC on a quarterly basis. We will issue you a NRL6 certificate at the end of the tax year explaining the amount of tax we’ve deducted. It will then be your responsibility to liaise with HMRC to ensure that the amount of tax paid on the rental income is correct. We charge £240 (£200 + VAT) per annum for this service.

More details about this obligation can be found here.

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