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The following information has been sourced from the HMRC website.

A landlord who lives abroad for more than 6 months of the year must pay tax on any income they get from renting out property in the UK. If the landlord is a company or trustee, the rules about their usual place of abode apply.

The tax is collected using the Non-resident Landlord (NRL) Scheme and can be paid either by a letting agent or the tenant.

If the landlord is a joint owner, tax is paid on their own share of rental income.

Rental income can include money received for a wide variety of things such as:

  1. Letting furnished, unfurnished, commercial and domestic premises or land;
  2. Use of the furniture in a rented property;
  3. The granting of certain leases;
  4. Sporting rights, such as fishing and shooting permits;
  5. Allowing waste to be buried or stored on land;
  6. Allowing others to use the property – for example, where a film crew pays to film inside a person’s house
  7. Grants to help with allowable expenses, such as repairs;
  8. Enterprise investment schemes;
  9. Caravans or houseboats that are not moved around;
  10. Insurance policies for non-payment of rent;
  11. Service charges

Tenants

If the landlord lives abroad and tenants pay over £100 a week, tenants need to register with HMRC and deduct tax from the rent.
Tenants are also required to register with HMRC if they pay rent to a UK representative of the landlord, i.e. someone who is not a letting agent, such as a friend or a family member.

If HMRC have advised tenants in writing that their landlord can receive the rent with no tax deducted, tenants still need to register with HMRC and complete an annual report.

Letting Agents

Letting agents must operate the Non-resident Landlord Scheme no matter how much rent they collect, unless HMRC has advised in writing that the landlord can receive the rent with no tax deducted. Registration may still be required and an annual report completed.

Under the scheme letting agents can be an estate agent, solicitor, accountant or friend of the landlord and carry out the following:

  1. Help the landlord run their UK rental business;
  2. Receive their rent or control where it goes;
  3. Live in the UK for more than 6 months a year.

Only giving a landlord legal advice or services is not operating as a letting agent.

Tenant-finders

Tenant-finder don’t have to pay tax under the Non-resident Landlord Scheme if they a) collect their own fee for finding a tenant from rent payments, b) rent is collected for no more than 3 months and c) the tax is no more than £100

Information on how to register can be found here.

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