Non-resident property owner tax - income or investment?

BobFreeman

I had to move to Europe as I could not afford living in London any more. I am british citizen but non-resident in the UK and pay taxes in my country of residence. I let my property out and HMRC wants me to pay 20% on the total amount of rent.

I looked at their website and it seems that this is applied to non-resident landlords ie investors in UK property..

I believe that I do not qualify as I only let the property because I cannot sell it. Its the only property in the UK I own - I lived in it for 11 yrs before I left. And the mortgage on it is residential. Therefore I believe the rent should be seen as a regular income (and not non-resident landlord investment) and taxed as a personal income - in the country of my residence.

Am I right? And how do I convince HMRC that I am?

Linton

https://www.gov.uk/tax-uk-income-live-abroad/rent looks very clear: if you are a non resident and a landlord you pay tax on the income, no "ifs" or "buts" and no mention of "investment".

sheramber

BobFreeman said:

I had to move to Europe as I could not afford living in London any more. I am british citizen but non-resident in the UK and pay taxes in my country of residence. I let my property out and HMRC wants me to pay 20% on the total amount of rent.

I looked at their website and it seems that this is applied to non-resident landlords ie investors in UK property..

I believe that I do not qualify as I only let the property because I cannot sell it. Its the only property in the UK I own - I lived in it for 11 yrs before I left. And the mortgage on it is residential. Therefore I believe the rent should be seen as a regular income (and not non-resident landlord investment) and taxed as a personal income - in the country of my residence.

Am I right? And how do I convince HMRC that I am?

No, you are not  right so you cannot convince HMRC that you are.
 

[Deleted User]

Read this: particularly the section on the rules about receiving your rent without tax. Without completion of the relevant form NRL1a tax must be deducted by any letting agent. Your income from this property is .......income. However, is your property income more than your personal allowance?

https://www.gov.uk/tax-uk-income-live-abroad/rent

csgohan4

BobFreeman said:

I had to move to Europe as I could not afford living in London any more. I am british citizen but non-resident in the UK and pay taxes in my country of residence. I let my property out and HMRC wants me to pay 20% on the total amount of rent.

I looked at their website and it seems that this is applied to non-resident landlords ie investors in UK property..

I believe that I do not qualify as I only let the property because I cannot sell it. Its the only property in the UK I own - I lived in it for 11 yrs before I left. And the mortgage on it is residential. Therefore I believe the rent should be seen as a regular income (and not non-resident landlord investment) and taxed as a personal income - in the country of my residence.

Am I right? And how do I convince HMRC that I am?

OP please back your claims up, as I believe or I thought will not wash with the HMRC, should you be investigated. 

You need to brush up on your tax and legal status on renting out to protect your self, your agent are not responsible, you are

yorkiechick

It is income arising in the UK and therefore is subject to UK tax. If your letting agent is taking a straight 20% tax each month, it is likely you are overpaying if you have no other UK income, as your personal allowance won't be taken into account. In this case I would submit a tax return each year to declare the rental income and tax paid, any overpayment will then be refunded to you.

Jeremy535897

yorkiechick said:

It is income arising in the UK and therefore is subject to UK tax. If your letting agent is taking a straight 20% tax each month, it is likely you are overpaying if you have no other UK income, as your personal allowance won't be taken into account. In this case I would submit a tax return each year to declare the rental income and tax paid, any overpayment will then be refunded to you.

If you are paying tax on the rental income in your country of residence, you may be able to get some of that back, depending on what the double tax agreement between your country of residence and the UK says about rental income. You should not pay more than the higher of the two taxes.

BobFreeman

Jeremy535897 said:

If you are paying tax on the rental income in your country of residence, you may be able to get some of that back, depending on what the double tax agreement between your country of residence and the UK says about rental income. You should not pay more than the higher of the two taxes.

this is actually my main issue - I am ok to pay tax. But it looks like I have to pay 20% to HMRC (well because they say so) and I have to pay another tax here in CZ. And Czechs refuse to speak English and their public services are above the law.. It would be next to impossible to have a constructive dialogue with them.

Jeremy535897

This might be helpful:
https://www.gov.uk/government/publications/calculating-foreign-tax-credit-relief-on-income-hs263-self-assessment-helpsheet/hs263-relief-for-foreign-tax-paid-2019

pchelpman

Two issues here. To reinforce what others have said...in basic terms .....
In the UK > file your UK Tax Return*.....claim the full UK personal allowance, as usual, if you are entitled to do so (sounds like it)....pay tax in the UK on any excess taxable income* above that personal allowance.
In Cz > declare the same income on your Cz Tax Returns but, under the double tax agreement, make sure you claim a deduction there for any UK tax you paid. 
*including not only the rental income but all other UK sources of taxable income 

BobFreeman

Thank you pchelpman