- Things to be aware of:
Requirement to provide UK notice address
The Landlord must provide the Tenant with an address in England and Wales at which notices can be served. This requirement is set out in Section 48 of the Landlord and Tenant Act 1987.
Tax / non-resident landlord scheme
If a Landlord lives abroad for more than 6 months they will be classed as a non-resident. All non-residents have to file a self assessment tax return. (see below)
There are two different ways of dealing with tax when there is a non resident Landlord, either the tenant/agent applies for the Non-resident Landlord Scheme and deducts tax from rental payments (incorporating allowable expenses) (see below) or the Landlord applies for the scheme and pays by self assessment.
Tenant or letting agent application to the scheme
If the Landlord is receiving rental payments directly from the tenant then the tenant will be required to apply to the scheme. If there is a letting agent that collects rent on behalf of the Landlord then it will be the letting agent that is required to apply to the scheme.
Essentially either the tenant, or the letting agent if applicable, will be required to deduct the tax (currently at 20%) before passing the rental payment to the Landlord. They are allowed to incorporate their allowed expenses before making the calculation.
The tenant or letting agent will then have to account for this on a quarterly basis to HMRC. They must give the Landlord a certificate at the end of the tax year saying how much tax they’ve deducted.
Overseas Landlord application to the scheme
Alternatively the Landlord can apply to receive the rent in full and pay the tax through self assessment. If the Landlord wants to do this they will need to apply for the scheme by completing form NRL1. If the application is approved, HMRC will tell the letting agent or tenant not to deduct tax from the rent and the Landlord will need to declare its income in the Self Assessment Tax Return.
Self Assessment Tax Return
Either way the Landlord will need to complete the Self Assessment tax return in (unless HMRC tells them not to) and complete the ‘residence’ section and the ‘property’ section listed below.
The Landlord cannot use the online filing facility for the self assessment tax return which must be sent by post or with assistance from a professional such as an accountant.
form SA109 (residence)
form SA105 (property)
2. What OpenRent can (and can't) support with
You can use our services regardless of where you're based, but please note that we can't operate as your agent for the purposes of the non-resident landlord scheme, and therefore we can't provide services such as rent collection for landlords who are not UK-based.
Information on this site is by way of general guidance only and may not apply in your particular circumstances. You should not act or refrain from acting upon information on this site without seeking independent legal advice.