Reporting your UK property income when you live abroad

  • by Carole Jordan
  • 04 Dec, 2017
reporting your UK property income when you live abroad businessheads accountants and consultant brighton

This may sound like a complicated issue but it doesn’t need to be. Read below to find out the key points you need to consider.

Do you need to report your UK property income when you live abroad?

Yes, your UK property income will need to be reported in the UK.

Your letting agent or tenant is responsible for deducting 20% tax withholding from gross rents and paying it to HMRC. They should be aware you are living abroad and this requirement is designed to avoid tax evasion so is very strict.

However, this is likely to lead to an overpayment of tax and so if you have expenses to deduct from your rental income it would be worth while completing accounts to establish the profit you are making and submitting this for tax purposes.

To do this, complete a NRL1 form online (Link?) to advise HMRC that you will be reporting the income on your tax return.  

Does this mean you'll need to register for self-assessment?

Yes, if you aren’t already registered then you will need to register online with HMRC informing them you need to complete a self-assessment tax return. You can opt to complete the tax return yourself, or you can employ the services of an Accountant .

Does this mean you'll also need to report other income?

If you have other income things are more complicated and often affected by the double taxation treaty with the country you live in. Often you will be able to disregard certain income; this includes income such as, bank interest and dividends. By doing this however, you may lose your personal allowance.

It’s best to check that you’re eligible for a personal allowance before making a decision on this. Refer to HMRC’s notes on double taxation treaties and see if you’re country of residence is eligible.

There is also an issue in the first tax year when you may be considered temporarily non-resident. If this happens you will be charged for the income previously disregarded upon your return to the UK.

If you have UK income other than your property rent then you should take professional advice to ensure you are dealing with your whole situation correctly.

If you’d like any more information on the above then contact us for a review of your tax position. As qualified tax advisors we’re trained to help you better understand these sometimes complicated tax issues. Call us now on: 01273 882200.

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