Letting a UK Property

Many people who leave the UK to work overseas or to return to their original home decide to let their house in the UK. If you are in this position you should be aware that a surplus of rental income over allowable rental expenses remains taxable in the UK, irrespective of where you are tax resident.

There is an added complication in that if you leave the UK to live abroad your tenant (if you have not appointed a letting agent) or the letting agent (if you have) must deduct tax at the basic rate from your rental income less the allowable expenses, and must pay this to the Inland Revenue.

However, you can apply toThe Centre For Non Residents (the special tax office that deals with these issues) for approval for your property income to be paid to you without tax being deducted. (Note: This does not mean that the rent is exempt from UK tax.)

You will also be expected to submit a UK Tax Return each year, even if the rental expenses exceed the rental income. A Self-Assessment tax return will be issued to you to enable you to account for the tax due.

This application is made by completing form NRL1,"Non-resident landlords - Individuals".

There are more details in the Inland Revenue's booklet IR140.