Non Resident Landlords

As from 6th April 1996 there were fundamental changes in the way tax is deducted from rental income if you are usually resident outside the UK

Managing agents or, where there is no agent, the tenant must account for tax at the basic rate on the United Kingdom rental income of any Landlord.

You may apply to receive you rental income with no tax deducted provided:-

• Your Tax affairs (Including payment of tax) are up to date.
• You have never had any UK tax obligations or
• You do not expect to be liable to UK Tax

In each case you must undertake to comply fully with you UK tax obligations and notify the Inland Revenue of changes in your circumstances. All tax deducted must be paid to the Inland Revenue on a quarterly basis.

You must apply to the Centre For Non Residents for your rent to be paid gross. We suggest you consult a tax accountant prior to you leaving the country if you are unsure.

Landlord Resident in the UK

For Landlords who will remain within the U.K. during the time their property is let will be liable for UK tax on any income earned from Rent. There are of course numerous things that can be offset against this tax liability for example:

• Any unsused Personal Tax Allowances
• Your Letting Agents or Accountants Fees (not including VAT)
• You may deduct approximately 10% to cover wear & tear

There are of course other items that may be used to offset your tax liability. We would suggest that a consultation with an Accountant or Tax Advisor would be a prudent investment to ensure that you will only pay the taxes for which you are liable.