Non-resident landlord - self assessment?

vbt

Hi,

I was wondering whether anyone could help me?

I'm going to work overseas (non-EU) in a few months time and will be gone for at least 1 year, but maybe up to 3 yrs. I'm thinking about letting my flat out whilst i'm away so I think that means I have to file a self-assessment tax return, right?

I'll be paying UK tax and NI contributions for the whole time i'm away because I'm a civil servant, so administratively speaking i'll be a UK resident, but not in terms of my private income from letting my flat (as far as i can make out from the HMRC website).

Will the letting agent fees be tax deductable (they'll just find tenants, but won't manage the property itself whilst i'm away). Also, out of the rent I will be paying the monthly service charge on the property (which covers maintenence, building insurance etc) - can I claim that back?

Is there anything else to bear in mind when doing the form considering I'm pretty clueless about it all and have never done a tax return??

Also, I know this might be a stupid question, but if i move abroad in July, I don't file a tax return until the following March do I?

Lastly, I'm thinking of hiring an accountant to do it for me, but have had lots of conflicting advice saying that either they save you money, or that it's a waste of money because self assessment is so easy and my rental income will be around £700pcm so not a huge amount of income per year.

Any advice greatly appreciated!

00ec25

vbt wrote: »

IWill the letting agent fees be tax deductable (they'll just find tenants, but won't manage the property itself whilst i'm away). Also, out of the rent I will be paying the monthly service charge on the property (which covers maintenence, building insurance etc) - can I claim that back?

you didn't finish reading the links I gave you on your original post did you

HMRC website basic guidance: http://www.hmrc.gov.uk/CNR/nr_landlords.htm#45
the full details : http://www.hmrc.gov.uk/manuals/pimmanual/index.htm

Examples of expenses which are allowable



Expenses paid by letting agents and tenants which will normally be allowable expenses are:

• accountancy expenses for the rental business
• advertising costs of attracting new tenants
• cleaning
• costs of rent collection
• Council Tax while the property is vacant but available for letting
• gardening
• ground rent
• insurance on buildings and contents
• interest paid on loans to buy land or property
• interest paid on loans to build or improve premises
• legal and professional fees
• maintenance charges made by freeholders, or superior leaseholders, of leasehold property
• maintenance contracts (for example gas servicing)
• provision of services (for example gas, electricity, hot water)
• rates
• repairs which are not significant improvements to the property, including: mending broken windows, doors, furniture, cookers, lifts, etc painting and decorating replacing roof slates, flashing and gutters
• water rates

Re your other questions:

- if it was me I'd apply for the NRL Scheme's dispensation so that you get your rent gross, you will then have to do the SA return either by Oct (if on paper format) or 31 Jan (if submiited on line, for which you will need to ask HMRC for your reference number.
- if you start renting out in July 2010 then that is tax year 10/11 so your first tax return and tax payment on earning July 2010 to April 2011 will be due on (or before) the final deadline of 31 Jan 2012
- as regards using an accountant, then the costs of them doing your SA tax return are not deductable because that is not a cost relating to the rental business only, it is a cost of your own personal affairs. So the economics of getting one to do your entire SA return depends on how complex your other affairs are, eg. any overseas dividends, any untaxed interest (excluding ISAs), higher rate tax reclaims on (non PAYE) pension contributions?
- In terms of the property tax preparation itself, then you could get an accountant to advise only on that and to produce a tax allowable bill covering such work only, but realistically you can evaluate the cost effectiveness of that by simply adding up your total property costs, knock off any which are obviously related to the explicit HMRC guidance and then see if the accountancy fee is more or less than the net total @20% (or 40% if higher rate) because that is the max amount the accountant could save you. Somehow I doubt there would be much in it, but as a first attempt getting advice on the property bit only might be more comfortable and should be no more than £200 max in accountant fees.