Non-Resident Landlord Scheme - help!

RRug

Hi

I am about to register for the Non-Resident landlord scheme. I live abroad but have a flat to rent out in the UK which I am going to do with a letting agent.

For the last year I have been renting my flat out to my niece, from who I received rent. She no longer rents from me. This was a private agreement with no letting agents involved.

My question is do I have to declare the past year's rent, which just covered my mortgage with about £20 to spare? Has anybody registered for the Non-resident landlord scheme and not declared previous incoming rents? If I don't declare, what are the chances of being caught?

Does renting to a family member make any difference?

Any advice would be appreciated.

mel19632

It counts - you should declare it. Forms are not overlly difficult, but an accountant/ tax advisor will be able to do it for you. HMRC are clamping down on landlords not declaring income

justlikethat_2

I rented out a flat while I was abroad although that was eight years ago. If you are using a letting agent you should check with them after all you will be paying them.

In my case I remember there was an allowance which the rent never exceeded although I did have to fill out a UK tax return, this was relatively simple as I was not paying any other tax in the UK. I opted to do it myself as although the agent would do it for me they obviously charged extra for this. At the end of each tax year all I needed to get was a certificate from them stating what my rental income was and what outgoings I had in the way of repairs maintenance etc. This went to IR along with the completed form.

Unless your niece falls out with you and decides to blab to the tax people I don't see how they will find out. Now getting your self assessment form back late is another matter especially if you live abroad make sure you get it done well before it is due.

I don't think the fact it was a relative you rented to makes any difference. Sounds like you would not be liable for any tax anyway so if it was me I probably wouldn't volunteer the information about the previous year unless I was asked! You would just end up confusing them!

RRug

yes, that's my opinion - that it would only be confusing (and slightly illegal!)

My only worry is that on the Non-Resident Landlord form there is a question where it asks when I left the country, which is one year ago. Given that I am not letting out my flat with the letting agent until the second week of next month, the IR may then ask what has happened to the flat since I left - there's a missing year to account for.

Thoughts?

clutton_2

fess up and make sure you include all your costs for running your BTL business - phone calls, power, heat, light for your office,` petrol to visit it before going abroad, postage, CORGI gas inspection, insurance etc etc you can also carry forward losses from one year to the next.

tbs624

Agree with Clutton - you should be honest with HMRC.

Was the rent less than £100 per week? See here

The full info on the non-res LLs scheme is here. Bear in mind that if you want to apply to receive your gross rent, rather than having the tax deducted by the tenant/LA, then HMRC can refuse if they believe that information you have given is incorrect.