Tax Implications

Income tax is payable on all rental income arising from property in the United Kingdom regardless of the residential status of the landlord. Landlords living in the UK should include details of their income and expenditure when completing their income tax returns in the usual manner. Under the 1995 Finance Act, the lettings agent is obliged to advise the Inland Revenue that a letting has been arranged for a landlord who is non resident for UK tax purposes.

The Agent is liable for the payment of any tax, which arises from the letting and must therefore retain monies at the current tax rate, to cover this liability. Non resident landlords can apply to the Inland Revenue for an assessment on income from rental property. If this is granted, then the Inland Revenue will issue an exemption certificate and the agent will then be no longer bound to retain tax on the rental income.

Agents do not undertake to submit your tax returns and would recommend that you appoint an accountant to handle your tax affairs.