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Have you just got an exciting post overseas and want to rent your UK home while you are abroad? Or maybe you are an expat who retains some rental properties in the UK?  Sunnier climes may await, but to get the most out of your new lifestyle make sure your UK property is properly looked after and that the essential paper-work is completed.

What should the overseas landlord be considering?

Think legal requirements and common sense when getting your property affairs in order.

All landlords, whether UK based or overseas, have duties that must be observed to stay on the right side of the law. These are largely focused on the safety of tenants, so include appliance tests, gas tests etc. Read this blog post for a little more detail on the necessities and the sensible steps you can take when getting a property ready for rent.

Complete an NRL1 form for HMRC

When it comes to overseas landlords, the main additional item to add to the ‘to do’ list is to complete an NRL1 form. This registers a landlord to HMRC’s non-resident landlord scheme so they can receive UK rental income without deduction of UK tax.

HMRC’s definition of an overseas landlord

HMRC look at ‘usual place of abode’ rather than residency status. Normally if a landlord has a UK rental income and is absent from the UK for more than six months then they will be affected. Companies and trustees can also be regarded as non-resident landlords and have their own qualifying criteria. You can find these criteria here as well as more details on the scheme.

If your application is successful, your lettings agent can pay rent directly to you without deducting tax. (although please note the rent is not exempt from UK Income Tax and you may need to complete a UK self-assessment tax return).

Use a good lettings and property management agent

There are obvious benefits of using a good lettings agent if you are not going to be around to administer the property, such as:

  • To make sure the property is well maintained
  • To make sure the necessary checks are carried out on the property
  • To handle any tenant queries
  • To market the property if new tenants need to be found
  • To give you peace of mind

But a less obvious reason is that if your NRL1 application is unsuccessful or withdrawn at a later date and no lettings agent is in place, the requirement to deduct and pay tax to HMRC would, perhaps surprisingly, fall to the tenant. This could be quite burdensome so it really is better having a professional lettings agent to do it.

So, in our opinion, the top two things on the ‘to do’ list are:

  • Complete the NRL1 form for HMRC and,
  • Speak to a good lettings agent to guide you through the rest of the processes.

Gough Quarters are a skilled property management company that can expertly handle all the issues facing an overseas landlord. To discuss your options contact us today on 0117 329 0039.

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