Periodic tenancy, one month notice to quit, legalities?

tbs624

To respond directly to the queries you raised after my earlier post

moosticks wrote: »

You ENTIRELY lost me here. Would this be included in the tenancy agreement? Can we not just give them notice via email? I believe the address on the tenancy agreement is their address in Australia...

The requirement for a LL living outside Eng & Wales to provide an address in either England or Wales is set out in the LL& T Act 1987

s47
(1)Where any written demand is given to a tenant of premises to which this Part applies, the demand must contain the following information, namely—

(a)the name and address of the landlord, and
(b)if that address is not in England and Wales, an address in England and Wales at which notices (including notices in proceedings) may be served on the landlord by the tenant.

(2)Where—

(a)a tenant of any such premises is given such a demand, but
(b)it does not contain any information required to be contained in it by virtue of subsection (1),

then (subject to subsection (3)) any part of the amount demanded which consists of a service charge (“the relevant amount”) shall be treated for all purposes as not being due from the tenant to the landlord at any time before that information is furnished by the landlord by notice given to the tenant.

(3)The relevant amount shall not be so treated in relation to any time when, by virtue of an order of any court, there is in force an appointment of a receiver or manager whose functions include the receiving of service charges from the tenant.
(4)In this section “demand” means a demand for rent or other sums payable to the landlord under the terms of the tenancy.

s48
(1)A landlord of premises to which this Part applies shall by notice furnish the tenant with an address in England and Wales at which notices (including notices in proceedings) may be served on him by the tenant.

(2)Where a landlord of any such premises fails to comply with subsection (1), any rent or service charge otherwise due from the tenant to the landlord shall (subject to subsection (3)) be treated for all purposes as not being due from the tenant to the landlord at any time before the landlord does comply with that subsection.
(3)Any such rent or service charge shall not be so treated in relation to any time when, by virtue of an order of any court, there is in force an appointment of a receiver or manager whose functions include the receiving of rent or (as the case may be) service charges from the tenant.

Re HMRC and tax situation

I haven't got a clue about this either. How do I find this out, and what happens if they haven't?

Contact the local HMRC office and say that you need to talk to them about the Non Resident LL scheme

Which tenants have to operate the NRL Scheme?

Tenants of non-resident landlords have to operate the scheme if:

• the rent they pay is over £100 a week

and either:

• they pay the rent direct to a non-resident landlord
• they pay the rent to a person outside the UK
• they pay the rent to a person who is not a letting agent in the UK

HMRC may sometimes instruct tenants to operate the scheme even where the rent paid is less than £100 a week.
HMRC has produced a booklet called Non-Resident Landlords-guidance notes for letting agents and tenants that tells people what their responsibilities are under the scheme.

As I said, get some qualified legal advice, especially regarding the 14k - fixed fee appointment with a suitably experienced solicitor or if you are on a low income you may qulaify for help via Community Legal Advice link

How much equity do they have in the rental property - you should ask a legal adviser for guidance on getting a charge placed against the property so as to be able to recover that 14k

tbs624

RAS wrote: »

In which case this is not a valid rental agreement. The address for the serving of notice must be in England and Wales if the house is in England and Wales. Without this you do not have to pay rent.

My bolding The rental agreement is *not* rendered invalid - lack of appropriate address simply means that LL may not collect rent until one is provided ( T then has to pay rent up to date)

RAS wrote: »

Do they use an estate agent? If not they MUST have given you as certificate from HMRC confirming that they are paying tax on their income.

My bolding. The LL does not have to use an Estate Agent - it can be anyone they choose to have acting as their Agent to deal with the letting.

G_M

moosticks wrote: »

This is the first my husband and I have heard of this.I'm not surprised! I don't know if that's stupid,no or what, but that is the situation we find ourselves in.

How could/should we have found this I have NO idea! without me posting this thread? Is there some glaring flaw in the situation that we've completely overlooked?
Yes. The flaw is that HMRC do not publicise this law. Nor does anyone else. Very few people, landlords included, know about it!
You know, aside from the fact my inlaws are complete and utter ____ (fill in the blank).

What happens now? Continue jumping through their hoops because ultimately they've got us completely by the balls?

Thinking I should start a new thread entitled "untracable ways to screw over shady landlords".

Thanks for everyone's input.

The NRL scheme is a grossly unfair scheme.

From HMRC's point of view it is understandable. Someone overseas, who they cannot 'chase' for tax owed, is receiving rent directly without it passing through the hands of anyone (eg letting agent) in the UK. So the only person they can 'chase' to get their hands on the tax owed is the tenant.

But as you say, tenants don't know this. They have no way of finding out other than either pure chance (like you via this forum) or when they get a tax demand from HMRC.

Having said that, I have never actually heard of a tenant being chased for their LL's tax under this scheme.

I'd be interested to hear from any tenant who has fallen foul of the NRL scheme in this way.....

Personally, I would not alert HMRC to the situation - it can do you no good, and may end upcosting you! But you should be aware of the Scheme.... if you stay in the property, start witholding rent to cover the possible tax, and if the possible tax for the months/years you've already been there is more than the monthly rent (likely) then wihold the entire rent until you have equalised the two amounts.

But keep the money aside in a seperate account. It is not your money, it belongs either to the LL (if he can show you he has paid his tax) or to HMRC (if he has not paid it, and they demand it).

But let's be realistic here. Your biggest problem is the £14K !

jamie11

If your landlord is sensible then any rent he gets from you should go to a UK bank account, he then declares it through his accountant and pays his tax accordingly. I'm overseas and all my receipts go through my banks first, my accountant sees to the rest, I sleep the sleep of the good.

Oh yeah, and pay the accountant a bl**dy fortune every year.

G_M

jamie11 wrote: »

If your landlord is sensible then any rent he gets from you should go to a UK bank account, he then declares it through his accountant and pays his tax accordingly. I'm overseas and all my receipts go through my banks first, my accountant sees to the rest, I sleep the sleep of the good.

Oh yeah, and pay the accountant a bl**dy fortune every year.

This is obviously a sensible arrangement.

However strictly speaking, as a non resident LL receiving rent directly (ie not via an agent) you should apply to HMRC for 'approval to receive rent with no tax deducted'.

And you should then show that HMRC approval to your tenant, so that he knows he does not have to deduct tax himself.

I know I know... crazy!

jamie11

G_M wrote: »

This is obviously a sensible arrangement.

However strictly speaking, as a non resident LL receiving rent directly (ie not via an agent) you should apply to HMRC for 'approval to receive rent with no tax deducted'.

And you should then show that HMRC approval to your tenant, so that he knows he does not have to deduct tax himself.

I know I know... crazy!

I agree........and, of course, I have done that. Surprisingly perhaps, speaking directly to a rep. from HMRC is a lot easier than skulking around hoping they are not going to notice you.

franklee

G_M wrote: »

I know I know... crazy!

It does seem crazy at first read I'll agree. But on reflection it's just deduction tax at source like employers do via PAYE or like the banks do on savings interest unless a form to get exemption is filled in. It doesn't mean that that's the tax the landlord owes but if HMRC have the cash up front that's an incentive for the landlord to get in touch, fill in a tax return and claim any overpaid tax back. The alternative is HMRC would need to discover the let in the first place and then somehow track an overseas landlord down to get the tax. I get the impression letting agents are pretty used to doing this as routine, individual tenants often do not know about it at all.

G_M wrote: »

But as you say, tenants don't know this. They have no way of finding out other than either pure chance (like you via this forum) or when they get a tax demand from HMRC.

Having said that, I have never actually heard of a tenant being chased for their LL's tax under this scheme.

I do remember a detailed thread here where the tenant got slated on this forum for prying into the landlord's tax affairs because she was initially told by the landlord that she lived abroad. When the tenant spoke to the CNR helpline they did say they thought it unfair on tenants but do chase it up. They ended up giving her an exemption as although her landlord had not registered with the scheme she was being unclear about where she lived. In the end a letter from the landlord saying she wasn't non-resident after all was enough to let the tenant off the hook.

G_M

franklee wrote: »

It does seem crazy at first read I'll agree. But on reflection it's just deduction tax at source like employers do via PAYE or like the banks do on savings interest unless a form to get exemption is filled in. It doesn't mean that that's the tax the landlord owes but if HMRC have the cash up front that's an incentive for the landlord to get in touch, fill in a tax return and claim any overpaid tax back. The alternative is HMRC would need to discover the let in the first place and then somehow track an overseas landlord down to get the tax. I get the impression letting agents are pretty used to doing this as routine, individual tenants often do not know about it at all.

Except it's not really comparable with banks deducting tax from interest or employers paying PAYE.

Because it only applies to a very small minority of tenants.
A) where the landlord is overseas AND
where there is no agent

If ALL tenants had to deduct tax, then it would be common knowledge, and tenants would do it, just as when someone starts up a business they know they have to deduct tax from their employees wages.

I fully understand why HMRC do this, and yes, as I said, from their point of view it makes sense. But it is tough on any tenant caught out, because there is total ignorance amongst both LLs and tenants about this scheme and the tenant's liability.

Even Shelter (the housing advice charity) has nothing about this on their otherwise excellent website!