Moving back to South Africa and Renting UK Houses (Assistance Required)

Marcman

Hello everyone,

My first post , just like a kid playing with sweets for the first time.

I’ve done a bit of digging on the forum and I can’t seem to find info I need so I am wondering if anyone can offer assistance please in relation to Rental Houses in the UK whiles abroad.

Here are the details.

We are looking at moving back to South Africa soon as I’ve been offered a descent job; however I’ve been given very short timescales…..
I don’t have time to sell the houses I’ve acquired (1 rented out now) and other I’m living in which will need to be rented out as I’m tied into a substantial indemnity fee as well as the market being terrible!

I’ve been informed by my leasing agency that we need to fill in the tax form (NRL1)
And until they have that number, we will need to pay a 20% in come holding tax on rental income which is acceptable.

Here comes the issue, the one house has been rented out for nearly 5 years now has never been declared. (I know it’s our fault as we have been ignorant)

If we fill in this form, does anyone know if they will pick up how long the 2nd house has been rented out and if so will they back date the income acquired?
Stressful as you can image, however I have no clue where even to begin.

Anyone got some input or similar experiences?

TAX and I don’t understand each other so any advice or pointers are greatly appreciated.

Thanks
Marc.

G_M

Rental income is no different to any other income. It is taxable though there are expenses (here) that can be off-set against the tax.

Non resident LLs have to either have the tax deducted by their agent, or their tenant, or reach an agreement with the taxman.

All details are here.

Tax can be back-dated so you might have to pay tax on the last 5 years. If you were a good little boy, you would!

FTBFun

I’ve been informed by my leasing agency that we need to fill in the tax form (NRL1)
And until they have that number, we will need to pay a 20% in come holding tax on rental income which is acceptable.

This is standard procedure for non-resident landlords. However you can apply for this to be stopped if your tax affairs are in order. But:

Here comes the issue, the one house has been rented out for nearly 5 years now has never been declared. (I know it’s our fault as we have been ignorant)

If we fill in this form, does anyone know if they will pick up how long the 2nd house has been rented out and if so will they back date the income acquired?

this could be a problem. HMRC are not going to simply backdate the tax from when you first rented the property but could open an enquiry into your tax affairs for the past few years which would require you to provide records etc on the rental property.

My suggestion is you disclose for those years first. Have you ever completed a self assessment tax return? If so, you will need to send amended pages incorporating the rental income details for each year that you have missed out. It may be possible that you have no chargeable income, if your expenses (which include mortgage interest) are taken into account, and if furnished, you deduct 10% for wear-and-tear.

If you do owe tax, please note you will probably owe interest at least on the tax due

googler

So, the core of the problem is that you have two houses, and HMRC knows about the rental income of one of them (because you declared it on a tax return?) but doesn't know about the income from the other (because you've never put it on a tax return)?

BitterAndTwisted

No, I believe that the one property which has been let for the last five years has never been declared to the Revenue and the other property, which the OP currently lives in, will be let once they move to SA.

Marcman

BitterAndTwisted wrote: »

No, I believe that the one property which has been let for the last five years has never been declared to the Revenue and the other property, which the OP currently lives in, will be let once they move to SA.

Correct, and ive never had to do a TAX return.

BitterAndTwisted

If you've got income via any route other than your salary from which PAYE is deducted IT'S YOUR RESPONSIBILITY TO REQUEST A TAX-RETURN FROM THE REVENUE.

Is the property which has been let for the last five years being paid for on a residential mortgage, a BTL one or is it owned outright?

olly300

BitterAndTwisted wrote: »

No, I believe that the one property which has been let for the last five years has never been declared to the Revenue and the other property, which the OP currently lives in, will be let once they move to SA.

You will get a better response from accountants, book keepers and ex HMRC workers including ex-Tax Inspectors on the Cutting Tax forum.

Either post there or hopefully this thread will be moved by a moderator.

Marcman

BitterAndTwisted wrote: »

If you've got income via any route other than your salary from which PAYE is deducted IT'S YOUR RESPONSIBILITY TO REQUEST A TAX-RETURN FROM THE REVENUE.

Is the property which has been let for the last five years being paid for on a residential mortgage, a BTL one or is it owned outright?

Thanks for the responses, the property on an ISA mortgage, which well im paying the interest and the theory is im due to settle the loan amount at the end of the period.

tyllwyd

About the ISA mortgage - are you sure you will be able to continue with this when you move to South Africa? Will you still qualify for an ISA?

To be honest, it all sounds like a minefield to me - I'd get advice to an accountant sooner rather than later.