NRL tax form advice

[Gareth]

We are going travelling for seven months and have decided to let our house whilst we are away. Our letting agent has advised that we need to fill an NRL tax form because we will be out of the country for more than 6 months, if we dont they have said they will have to stop 22% tax out of our rental income each month.
Can anyone explain what this is all about? are they correct in what they have said and we need to do this even though we are just taking an extended holiday.

Also due to us letting the property at a low rate to ensure we have a tenant for when we leave it means that we wont really be making any profit, if this is the case do we still need to notify the Inland Revenue that we are letting our house? will we then have to complete a self assessment tax return each year?

Any advice would be much appreciated.

Thanks.

[Paul_W]

'Usual place of abode'
Although we refer to 'non-resident' landlords, it is usual place of abode and not non-residence that determines whether a landlord is within the scheme or not.

In the case of individuals, we normally regard an absence from the UK of 6 months or more as meaning that a person has a usual place of abode outside the UK. It is therefore possible for a person to be resident in the UK yet, for the purposes of the scheme, to have a usual place of abode outside the UK.

Taken from the HMRC website:
http://www.hmrc.gov.uk/cnr/nr_landlords.htm

[Tax Accountant]

If you let your property, you will be required to declare the rental income and expenses on a self-assessment tax form.

If you do not wish to fuffer the 22% tax deduction at source, you could register with the Inland Revenue and declare that you will be responsible for completing the self-assessment tax form for each tax year.

If the letting stops, you could request the Inland Revenue to take you out of self-assessment.

It may be possible to account for your rents by coding adjustment if you have employment income. This may avoid having to complete self-assessment tax returns.

Ramnik

[Taxation Solutions]

Gareth

Basically as you will be a non resident UK landlord you will need to complete the form/s NRL1. Assuming your tax affairs are in order, the Inland Revenue will usually say it is OK for your letting agent to pay your rental income to you gross. As your letting agent has said, failure to do this could mean they will withold basic rate tax from your rental income which they will be obliged to pass onto the Inland Revenue.

You will be required to declare your UK rental income and expenses in the normal manner on a UK tax return.

Jason
www.propertytaxation.co.uk