HRMC Non-Resident Landlord Scheme

[Guest jennahawkey]

We moved to Perth in March this year, and have 2 flats in London that we continue to rent out. We've had a letter form HRMC telling us we need to apply for the Non-resident landlord scheme.

 

I've tried to read up about this but can't understand if it's a benefit to us, or if it's going to cost me more money!!

 

http://www.hmrc.gov.uk/international/nr-landlords.htm

It says that the tenant needs to deduct basic tax from the rent before passing it on. What does that mean???? It sounds as if the tenant simply puts 20% of the rent back in his pocket every month. Has anyone had experience with this scheme that can explain it in laymans terms?

[fifi69]

Im no good at explaining this but will try and tell it from what i understand. We too are new to this and have rented our property out in the uk via a letting agent. Before we left we had to fill in a non residents tax form, detailing where we are, how much rent we are getting, agents fees etc. As i understand it we now pay 20% LESS tax on the income received but also we can claim the tax back on any maintence we need to do. New appliances, decor that kind of thing.

What im not sure about is how it effects things when you do your tax return here. I tried phoning HRMC on numerous occasions before moving here. What a waste of time that was, ur lucky if your call gets picked up within the hour and then they cant tell you what you need to know. As you say their website is not user friendly to the masses

[phil]

That's my understanding too - as long as you fill in the forms and tell HMRC what's happening you'll not pay unnecessary tax. If you've already done a P85 too you may find they owe you money.

For the Oz tax man, if you use the eTax program to complete your tax return it has quite good explanations of what they care/don't care about as far as overseas property is concerned.

[Guest jennahawkey]

Thanks for the responses. The NET profit I make off the properties is practically zero (rent less interest paid), so I don't currently pay tax on the income, so this shouldn't have any effect on me? Is that correct?

 

Thanks

[Rosshf]

We moved to Perth in March this year, and have 2 flats in London that we continue to rent out. We've had a letter form HRMC telling us we need to apply for the Non-resident landlord scheme.

 

I've tried to read up about this but can't understand if it's a benefit to us, or if it's going to cost me more money!!

 

http://www.hmrc.gov.uk/international/nr-landlords.htm

It says that the tenant needs to deduct basic tax from the rent before passing it on. What does that mean???? It sounds as if the tenant simply puts 20% of the rent back in his pocket every month. Has anyone had experience with this scheme that can explain it in laymans terms?

 

 

Hi

 

I filled out one of these: http://www.hmrc.gov.uk/cnr/nrl1.pdf which means the tenant/letting agent don't have to deduct tax. I'm surprised HMRC expects tenants (as opposed to letting agents who are more geared up to this) to keep track of tax, reducing their payment by basic rate and then paying to HMRC. What a convoluted way of getting the tax. Can't imagine it works very well.

 

If I were you I'd fill out the NRL1, then you don't have to worry about input from tenants, you can more easily deal with the profit/loss of renting and show HMRC you don't owe them anything. I wonder if any loss would be beneficial for tax in Oz...

 

Cheers

Ross