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Non UK wife rents out UK properties
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RDB
Posts: 872 Forumite
My question is this - If my wife who is non-resident of UK and lives abroad and buys property in UK and rents it out, does she have to pay UK income tax on the rental income?
Obviously she has to declare it in her country and will pay tax there, but one other thing, would she be ok to visit and maybe live in this country for short times each year and if so how long before she is classed as living in this country?
I have heard that there are special rules charging Non-residents who run trades, professions or vocations in the UK but a property letting business is not a trade, profession or vocation.
Obviously she has to declare it in her country and will pay tax there, but one other thing, would she be ok to visit and maybe live in this country for short times each year and if so how long before she is classed as living in this country?
I have heard that there are special rules charging Non-residents who run trades, professions or vocations in the UK but a property letting business is not a trade, profession or vocation.
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Comments
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My understanding is that as your wife will have taxable income arising in this country, she will be liable for UK tax.
As the question about domicile and residence is a specialised area, you should seek advice from a qualified tax accountant.0 -
If the country in question has an agreement with the UK then your wife will only pay tax in one country, she does not have to pay tax twice.0
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it's possible to minimise her tax bill, but you need to get professional advice. It may be complicated if you live here in the UK & she lives abroad.
People always shout at me for suggesting this, but give HMRC a call with the details - they will at least tell you the basics. You can then go to an accountant to find the work arounds."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
You need to have a look on the Non-Resident Landlords Scheme on the HMRC site. Here's the link.
Some details:
Conditions for applying to HMRC Residency for approval to receive rental income with no tax deducted
Non-resident landlords can apply to receive their rent with no tax deducted on the basis that either- their UK tax affairs are up to date, or
- they have not had any UK tax obligations before they applied, or
- they do not expect to be liable to UK income tax for the year in which they apply, or
- they are not liable to pay UK tax because they are Sovereign Immunes (these are generally foreign Heads of State, governments or government departments).
Non-resident landlords are persons (this term includes individuals, companies and trustees) who have- UK rental income, and
- a 'usual place of abode' outside the UK.
In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Having CNR approval to receive rent without deduction of tax does not automatically mean that no tax is payable, though. It just means that the tenant or agent doesn't deduct 22% tax and pay this to HMRC before sending the rent to the landlord, as they are obliged to do for overseas landlords without CNR approval.
Tax may still be due and the landlord still has to fill in a tax return.0 -
Just as a Coda to the above, there was a piece in The Times today saying that the Treasury has had an enquiry (of the kick the subject into the long grass variety) going on for ages.
The tone of the piece was that this enquiry was going to be taken seriously now as the reckoning was that £10,000,000,000 in tax could be raked in if the rules are changed.0 -
Just as a Coda to the above, there was a piece in The Times today saying that the Treasury has had an enquiry (of the kick the subject into the long grass variety) going on for ages.
The tone of the piece was that this enquiry was going to be taken seriously now as the reckoning was that £10,000,000,000 in tax could be raked in if the rules are changed.
By non-voters - WINNER!!:money:"Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
Doesn't the tenancy agreement need a UK address on it to be legal?
Who's going to run the house whilst she's away?Money, Money, Money ..... Banks/Casinos/Bookies give me all you money its a poor mans world....0 -
I have someone to look after the place, any jobs need doing ect.
She is Japanese and we live in Tokyo most of time but visit UK every year.
She has nothing to do with UK at all at the moment just has some property and rent comes striaght here to Japan.
I dont want to rock the boat by calling departments and asking them about this, just keep it all here in Japan.
Im just a bit worried that if we do come back to UK and settle then they can go back years and suddenly claim she owes thousnads.0 -
I have someone to look after the place, any jobs need doing ect.
She is Japanese and we live in Tokyo most of time but visit UK every year.
She has nothing to do with UK at all at the moment just has some property and rent comes striaght here to Japan.
I dont want to rock the boat by calling departments and asking them about this, just keep it all here in Japan.
Im just a bit worried that if we do come back to UK and settle then they can go back years and suddenly claim she owes thousnads.
You can be quite non-specific if you call HMRC, or just lie about the details - I'd give them a call & ask about letting as a non-resident. Say you're considering doing it.
If they do think you owe them they will claim it all back + fines + interest - that's why it's better to do it above board. My guess is if they think she owes them & they can't get at her abroad, they'll put a charge on the property so that when it's sold they get the money."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0
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