Posted by Nick Day on 10 Oct 2013

Non-Resident Landlords – A UK Tax Update

HM Revenue & Customs (HMRC) have recently launched a campaign to collect tax they believe is owned by UK buy-to-let landlords not declaring their income. Please see our recent article for more details for non-resident landlords:

HMRC Approach

Tax Innovations can advise that we have recently been made aware that HMRC are approaching UK letting agents directly and requesting details of landlords, including their names and addresses.

In our experience, many properties in London and throughout the UK are owned and let out by non-resident landlords, who may well be unaware of their UK tax obligations.

Individual UK Tax Residents

Individuals that are UK tax residents and domiciled in the UK pay tax on their world-wide income and capital gains.  (If you are UK tax resident but non-domiciled, you may be able avoid UK tax on your non-UK sources of income and gains if they are not remitted (brought) to the UK, although specialist advice is recommended in this area due to the complexities in the UK tax law.)

Individual UK Non-Resident Landlords

However, “non-residents” of the UK are taxed on UK source income only.  The main such source we see reported is rental income from UK properties, although we often come across individuals who believe that UK income tax is not due on UK property income if they are tax resident in another country and reporting the income there.  This is incorrect and under UK domestic law and international tax treaty law, the UK will have the right to tax income from UK situated real estate, even if it is also subject to tax in another country.

For more details please refer to one of our more detailed articles on this issue:

The message from HMRC is clear – if you do not get your affairs up to date soon you will be penalised heavily.  We have helped many non-resident landlords who were not previously compliant bring their affairs up to date with HMRC and we will ensure you pay no more than you need to in terms of tax and potential penalties.  HMRC are currently running various “catch up campaigns” that will allow you to bring your affairs for past years up to date and ensure only minimum penalties are charged.

Contact us

If you would like any advice regarding the above article or would simply like to discuss other ways in which we could help you or your business, please contact us on 01962 856 990 or