Reluctant Landlords 2
Protect your property from the tax men (2)
The second of a five part series of advice from experts Montfort International plc for home-owning migrants
UK Tax on rental income
Any income you receive from letting UK property is taxable in the UK after deduction of allowable expenses, even if you cease to be a UK resident.
Once you are living in Australia you will be a non-UK resident landlord so your letting agents (or your tenant if letting agents are not employed) are obliged by law to deduct tax at the basic rate from the gross rent, less deductible expenses. They can only pay your rent gross if they have HM Revenue & Customs' (HMRC) authority. Provided your tax affairs are up to date you can apply for approval to have your UK rent paid gross by completing the appropriate form and forwarding it to the Revenue.
HMRC will usually send you a Self Assessment Tax Return once a year to establish whether you have any tax to pay. If the profit does not exceed the UK personal allowance (assuming you qualify) there is no tax to pay.
If you believe that renting out your UK property after migrating may be a viable proposition, seek specialist tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
The second of a five part series of advice from experts Montfort International plc for home-owning migrants
UK Tax on rental income
Any income you receive from letting UK property is taxable in the UK after deduction of allowable expenses, even if you cease to be a UK resident.
Once you are living in Australia you will be a non-UK resident landlord so your letting agents (or your tenant if letting agents are not employed) are obliged by law to deduct tax at the basic rate from the gross rent, less deductible expenses. They can only pay your rent gross if they have HM Revenue & Customs' (HMRC) authority. Provided your tax affairs are up to date you can apply for approval to have your UK rent paid gross by completing the appropriate form and forwarding it to the Revenue.
HMRC will usually send you a Self Assessment Tax Return once a year to establish whether you have any tax to pay. If the profit does not exceed the UK personal allowance (assuming you qualify) there is no tax to pay.
If you believe that renting out your UK property after migrating may be a viable proposition, seek specialist tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
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