Our complete tax solution for Non resident landlords

Martax Accountants are an expert team of chartered certified accountants providing accounting and tax services individuals and businesses. We are specialist property accountants for buy to let landlords based in London and Surrey. We provide non resident landlord tax return services for a fixed fee that ensures that the tax liability of landlords is kept to a minimum.

If you own a property in the UK and receive rental income as a non resident, you will have certain responsibilities towards HM Revenue and Customs (HMRC) and that is where Martax Accountants can help to fulfill all your obligations for being a landlord. Whether you are renting a room, a property/flat for long term let, or running a property business as a Furnished Holiday Let (FHL), our experts can help provide you with the best advice and on-going support to minimise your tax bill. Our landlord tax expert can discuss your tax needs over the phone, in our offices or at a place convenient to you.

Non Resident Landlords Martax Accountants

Who is a Non-resident Landlord?

Non-resident landlords are persons who have UK rental income and whose usual place of residence is outside the UK. If you are a landlord and live abroad for more than six month in a year, you will be classified as a ‘non-resident landlord’ by HMRC even if you are a UK resident for tax purposes.

How Non-Resident Landlord Scheme works?

The Non-Resident Landlord (NRL) Scheme is a scheme for taxing UK rental income of overseas landlords. This scheme applies to UK rental income paid to non-resident landlords who live abroad.

Letting agents must deduct tax from the non-resident landlord’s UK rental income and pay the tax to HMRC. Where there is no letting agent and the non-resident landlord is managing his UK property himself, tenants who pay rent of more than £100 a week to a non-resident landlord must deduct tax from his UK rental income and pay the tax to HMRC. 

Non-resident landlords can apply to HMRC for approval to receive rental income with no tax deducted.

Letting agents and tenants do not have to deduct tax from the rental income of a non-resident landlord if HMRC has told them in writing that the landlord is approved to receive the rental income with no tax deducted.

What if my rental income is less than UK income tax personal allowances?

If your total UK income as a non resident is less than the personal allowances (2022/23 tax year: £12,570), you will not be required to pay any tax on your rental profits. However, it is important to determine correctly whether or not you are eligible for UK income tax personal allowances being a non resident. If the income is more than personal allowances for the tax year, the following tax rates are applicable to the rental income:

Income Tax Rates 2022/2023
BandTaxable profitsTax Rate
Personal allowanceUp to £12,5700%
Basic rate£12,571 to £50,27020%
High rate£50,271 to £150,00040%
Additional rateOver £150,00045%

Am I eligible for personal allowances in the UK being a non resident?

If you are a British/EU citizen, you will be eligible to claim personal allowances as a non resident against your rental profits. However, if you are non EU citizen, you may or may not be eligible for personal allowances depending on the double taxation treaty between the UK and your country of residence. 

What are allowable expenses?

Expenses are deductible from rents only if they are incurred ‘wholly and exclusively’ for the business of letting. This means that if an expense wasn’t incurred for the purpose of your property rental you can’t offset the cost against the rental income. The most commonly incurred expenses in relation to rental property business are as follows:

  • Agent’s fees and commission
  • Repairs to the property
  • Water charges or council tax
  • Insurance premiums
  • Mortgage interest (Read about changes to tax reliefs from 6 April 2017)
  • Costs of services including wages of gardeners and cleaners
  • Legal fees for lets of a year or less, or for renewing a lease for less than 50 years
  • Accountant’s fees
  • Ground rents or service charges
  • Direct costs such as phone calls, stationary and advertising for new tenants
  • Vehicle running costs (only the proportion used for rental business)

The following is a list of some expenses which are not allowable:

  • The full amount of mortgage payment – only the interest element is allowable in part or full depending on whether you are a basic, higher or additional rate taxpayer
    For more details please read ‘Restriction of finance cost relief for individual landlords – changes from 6 April 2017
  • Personal expenses – you can’t claim any expenses which are not incurred wholly and exclusively for the purposes of rental business.
  • Private telephone calls – you can only claim for the cost of calls relating to letting property
  • Private travel expenses – you can only claim for the cost of travel relating to letting property

Our non resident landlord tax return services will ensure that you claim all the legitimate expenses to maximise your tax savings.

I will be charged tax on my UK rental income in my home country, is there any relief available in the UK?

Some individuals believe that UK tax is not due on their UK rental income as they will be charged to tax in their home country where they are resident. This is an incorrect assumption, UK will have the first right to tax income from UK situated real estates, even if it is also subject to tax in another country.

If the taxpayer is also liable to tax in their home country on their UK rental income, they will need to claim credit for UK tax against foreign tax charges in their country of residence.

Our Non resident landlord tax return services

Our non resident landlord tax return services team can help you to:

  • Calculate your taxable profits on the property
  • Advise on claiming all the legitimate expenses to optimize tax savings
  • Determining whether or not you are eligible for personal allowances
  • Complete your tax return using HMRC approved software
  • Advise you on the tax liability to be payable to HMRC and when they are due or if they have deducted too much tax at
    source, the refund to be credited direct to your bank account.

For more information and arrange a free consultation, please contact us.