This won’t affect most of my readers but where it does it’s a biggy!
Did you know that there is a whole scheme setup specifically to provide for tax to be deducted at source on rent payments? Yep. It applies to those landlords with a “usual place of abode” outside of the UK. It applies to individuals and companies alike.
What it means is that if you live overseas and have UK rental income then the tenant or the managing agent is meant to deduct basic rate tax from the rent before they pay it over. You as the landlord receive the “after tax” rent.
Agents and affected tenants (I can’t believe any tenant ever follows this scheme by the way!) have to submit quarterly returns with the tax deductions being notified and paid over. The tax is allowed to be claimed by the landlord as a credit against liability on any tax returns.
All of this can however be avoided by completing the relevant form and submitting it to HMRC. Form NRL1, if accepted, means that HMRC will exempt the landlord from immediate deductions and allow them to comply declare the rent on their tax returns like everyone else.
If you’ve gotten this far and aren’t an overseas landlord then far play on trying to keep your knowledge up! I salute you!