Non Residents & UK Property Income

I recently emigrated to Spain but still own a house in the UK which I am renting out. Are there any UK tax implications of which I should be aware?

1st August 2008

The income received from this property income is taxable in UK as it arises here, even though you will be classed as Non Resident for UK tax purposes. You will need to register for the Non Resident Landlord scheme and if you rent the property through an Agent they should be aware of the implications.

The scheme requires letting agents to deduct Basic Rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agent acting for them, and the rent is more than £100 a week (£5,200 per annum), their tenants must deduct tax and pay it to the Inland Revenue’s Accounts Office, Cumbernauld. When working out the amount to tax, the agent/tenant can take off tax deductible expenses in the normal way.

Taxpayers who receive income of £100 a week or less do not have to operate the scheme unless they are told to do so by HM Revenue & Customs.

Should you not wish to operate the scheme, you can apply as the landlord on form NRL1 to the Centre for Non Residents for approval to receive your rental income gross. This is usually given if your tax affairs are up to date or you do not expect to be liable to UK income tax for the tax year. You will still however need to include this information on a UK self assessment tax return each year.

For further information on the landlords and tenants responsibility see the information on website or contact your local TaxAssist accountant.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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