If I work overseas, do I have to pay tax on rental income from my UK home? | Tax


Q I managed to land a teaching job in Brunei, starting in August, which is very exciting.

I am currently in the process of getting my house ready to rent which I will do through an agent given the distance and time difference. However, I’m a bit puzzled by the tax side of things and was hoping you could help me out.

One agent told me that I will be liable for tax as a non-resident owner, while other agents said that was not the case. I’ve looked online (including through government advice) and still don’t feel sure.

Could you advise me on the state of affairs regarding taxes and any other advice you think I should have before renting for the first time?

A I hope you will use the first agent you spoke to as he is clearly more on the ball than those who told you that you would not be subject to tax as a non-resident owner. They clearly missed the part of their training that told them about the Non-Resident Owners Scheme (NRLS). Under UK law, this requires UK letting agents to withhold basic tax due from rental income before it is paid to a UK landlord who lives overseas. You are considered a non-resident landlord – and therefore fall under the NRLS – if you live outside the UK for more than six months. If there is no lettings agent, the tenant must withhold the tax and pay it to HM Revenue and Customs if the rent is over £100 per week.

If you do not want the rental agent to collect tax from the rent, you must send the NRL1 form either online or by post. This is worth doing provided your tax affairs are up to date and you do not expect to be liable to UK tax on your UK based income. Whether your rental income is paid before or after tax, you will need to complete a self-assessment tax return as you would if you were a landlord living in the UK.

However rent is paid, it makes sense to have it paid in pounds sterling to a UK bank account to avoid currency conversion charges.

You also need to make sure your mortgage lender is happy you’re renting your home, and check to see if your insurers need to make any changes to your buildings and contents policies once you have a tenant.


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