The following Personal Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
A person who is not resident in the UK is not taxed on his worldwide income. Instead, a non-resident is only taxable in the UK on his UK source income. See the Residence ― overview guidance note for more information.
Given that these individuals live outside the UK, without special provisions such individuals could evade the UK tax charge on their UK property income by virtue of their absence and non-declaration of this income.
Therefore non-resident landlords (NRL) are subject to the provisions of the non-resident landlords scheme (NRLS). The NRLS requires tax to be withheld on the rent, either by the tenant or letting agent as appropriate. However, the landlord can receive the rent without deduction of tax if he obtains permission from HMRC.
It is therefore necessary to consider:
It is also helpful to understand some of the basic planning issues relevant to NRLs including:
It is worth noting that if the property is commercial property, the NRL should to consider whether it is necessary to register for VAT. For VAT purposes, the UK VAT rules apply as normal, as the property is sited in the UK even though the property owner is not UK resident. See the Overview of VAT and property issues and Overview ― registering for VAT guidance notes (subscription sensitive).
This guidance note considers the position of a non-resident individual holding property
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